Contents. Section 1 Features of investing in the Funds. Significant features. Significant benefits

Transcription

1 Information Memorandum dated 1 July 2017 Macquarie SIV Cash Fund ARSN Macquarie SIV Conservative Fund ARSN Macquarie SIV Balanced Fund ARSN Macquarie SIV Growth Fund ARSN Macquarie SIV Government Bond Fund ARSN Macquarie Financial Products Management Limited - ABN AFSL This Information Memorandum (IM) is a summary of information about the Macquarie SIV Funds (each a Fund). You should read the IM before making a decision to invest in one or more of the Funds. You can access a copy of the IM free of charge from our website or by contacting us on This IM replaces the IM for the Funds dated 5 March Macquarie Financial Products Management Limited (MFPML, we, us, our) is the manager and responsible entity of the Funds. This IM has been prepared for use by wholesale clients as defined by section 761G of the Corporations Act 2001 (Cth) (Corporations Act). This IM is not a product disclosure statement for the purposes of the Corporations Act and must not be given to retail clients as defined in the Corporations Act. This IM does not contain the information which would be required to be included in a product disclosure statement if the Funds were being offered to retail clients. The information provided in the IM is general information only and does not take account of your personal objectives, financial situation or needs. It is not intended to be a recommendation by us or any other person to invest in a Fund. You should invest in a Fund only if it is an appropriate investment for you and if you are comfortable with the risks of this investment. You should obtain your own financial advice tailored to your personal circumstances. This offer is only available to persons receiving this IM in paper or electronic form within Australia. The information in this IM 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/sivfunds (SIV Funds Website). Contact us to obtain a paper copy of the updated information free of charge. All dollar amounts referred to in this IM are in Australian dollars unless otherwise indicated. To the extent permitted by law, MFPML accepts no liability whatsoever for any loss or damage arising from investors relying on any other information when investing. MFPML has not authorised any person (including other Macquarie Group companies) to give any information or make any representations in connection with the Funds which is not in the IM and if given or made, such information or representation must not be relied upon as having been authorised by MFPML. Any other parties distributing this product to investors are not our agent or representative and are doing so on their own behalf. We are not responsible for any advice or information given, or not given, to you by any party distributing this product and, to the maximum extent permitted by law, accept no liability whatsoever for any loss or damage arising from you relying on any information that is not in this IM when investing. The Funds are not authorised or endorsed by the Australian Government or the Department of Immigration & Citizenship. An investment in the Funds does not entitle the investor to a Significant Investor Visa, and MFPML does not make any representation, warranty or guarantee that a successful application for investment in the Funds will lead to an investor obtaining a Significant Investor Visa, and accepts no liability whatsoever for any loss or damage arising from you relying on an investment in the Funds as providing you with a Significant Investor Visa. Investments in the Funds are not deposits with, or liabilities of, Macquarie Bank Limited ABN or any Macquarie Group company, and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie Bank Limited nor any other member of the Macquarie Group guarantees the performance of the Funds or the repayment of capital from the Funds or any particular rate of return. Contents 1. Features of investing in the Funds 2. Summary of the Funds 3. How the Funds work 4. About Macquarie Financial Products Management Limited 5. Risks of the Funds 6. Fees and costs 7. How the Funds are taxed 8. How to apply 9. Other information Section 1 Features of investing in the Funds Significant features A choice of investment in government bonds or fund of funds with cash, conservative, balanced or growth strategies. Daily fund valuation and liquidity.* Significant benefits Provides access to a high quality portfolio of funds with exposure to Australian-based assets including equities, listed real estate investment trusts, bonds and cash. Portfolio diversification may be achieved via a single investment. Designed for investors who applied for a Significant Investor Visa issued by the Australian Department of Immigration & Citizenship prior to 24 April For a description of risks associated with an investment in the Funds, see Section 5 of this IM. *The Bond Fund is subject to restrictions on its liquidity, meaning withdrawal prior to end of the Reference Asset s term is unlikely. For more information see Redeeming your Units in Section 3. 1

2 Section 2 Summary of the Funds You should consider the likely investment return, the risks involved and your investment timeframe when deciding whether to invest into one or more of the Funds. Refer to Section 5 for more information on the risks of an investment in the Funds. Each Fund (except for the Bond Fund) will invest in one or more Underlying Funds, each falling within a particular Australian Asset Class as well as cash and cash equivalents. The Asset Class allocation for each Fund will have a target weight, as well as minimum and maximum weights. However, there are no target, maximum or minimum weights for the Underlying Funds within each Asset Class, meaning MFPML has complete discretion in allocating funds across an Asset Class s Underlying Funds. We will select an Underlying Fund that we believe will track the below Reference Assets (except the Bond Fund, which will invest in its Reference Asset directly). For further information about each Underlying Fund, including its risks and fees, see the product disclosure statement (or other offer document) for that fund. Reference Assets Asset Class Relevant Reference Asset Description of Reference Asset Australian Equities S&P/ASX 200 Index 200 leading companies by market capitalisation listed on the ASX at the relevant time. Australian Listed Property Australian Fixed Interest S&P/ASX 200 A-REIT Index DBIQ 0-5 year Australian Semi- Government Bond Index Tracks the stock performance of Australian real estate investment trusts in the S&P/ASX 200 Index. Diversified and investable exposure to Australian state government agencies with a minimum issuance outstanding of $1 billion based on face value. Securities equally-weighted based on market value. Australian Cash 30 day Bank Bill Swap Rate Traded market rate that serves as a benchmark rate for 30 day bankaccepted bills and negotiable certificates of deposit issued by banks in the Australian financial system. Australian Government Bonds Summary of each Fund Australian Commonwealth, State or Territorial Government Bonds Bonds offered by Australian Commonwealth, State or Territorial Governments in which the investor has been invited to invest. Macquarie SIV Cash Fund (Cash Fund) Description of Fund The Cash Fund invests only in Australian cash. Fund objective The Cash Fund aims to provide investors with low, stable returns and low risk exposure. Asset Classes and Asset Class Minimum weight Target weight Maximum weight weight ranges Australian Equities 0% 0% 0% Australian Listed Property 0% 0% 0% Australian Fixed Interest 0% 0% 0% Australian Cash 90% 100% 100% Australian Government Bonds 0% 0% 0% Cash and cash equivalents 0% 0% 10% Commencement date 27 March 2013 Macquarie SIV Conservative Fund (Conservative Fund) Description of Fund The Conservative Fund invests primarily in Australian fixed interest and Australian cash, with some exposure to Australian equities and limited exposure to Australian listed property. Fund objective The Conservative Fund aims to provide investors with low, stable returns and low risk exposure. Asset Classes and Asset Class Minimum weight Target weight Maximum weight weight ranges Australian Equities 15% 20% 25% Australian Listed Property 0% 5% 10% Australian Fixed Interest 35% 40% 45% Australian Cash 30% 35% 40% Australian Government Bonds 0% 0% 0% Cash and cash equivalents 0% 0% 10% Commencement date 27 March

3 Macquarie SIV Balanced Fund (Balanced Fund) Description of Fund The Balanced Fund invests primarily in Australian equities, with some exposure to Australian fixed interest and Australian cash and limited exposure to Australian listed property. Fund objective The Balanced Fund aims to provide investors with medium returns and risk exposure. Asset Classes and Asset Class Minimum weight Target weight Maximum weight weight ranges Australian Equities 30% 40% 50% Australian Listed Property 5% 10% 15% Australian Fixed Interest 20% 25% 30% Australian Cash 20% 25% 30% Australian Government Bonds 0% 0% 0% Cash and cash equivalents 0% 0% 10% Commencement date 27 March 2013 Macquarie SIV Growth Fund (Growth Fund) Description of Fund The Growth Fund invests primarily in Australian equities, with limited exposure to Australian fixed interest, Australian cash and Australian listed property. Fund objective The Growth Fund aims to provide investors with medium to high returns and risk exposure. Asset Classes and Asset Class Minimum weight Target weight Maximum weight weight ranges Australian Equities 45% 60% 75% Australian Listed Property 10% 15% 20% Australian Fixed Interest 10% 15% 20% Australian Cash 5% 10% 15% Australian Government Bonds 0% 0% 0% Cash and cash equivalents 0% 0% 10% Commencement date 27 March 2013 Macquarie SIV Government Bond Fund (Bond Fund) Description of Fund The Bond Fund invests in bonds issued by Australian Commonwealth, State or Territorial Governments or cash. It is expected that each investor will have been invited to invest in bonds by the relevant government body. Each investor will be the sole unitholder in their unit class, with the sole class asset for each class being a single bond. Fund objective The Bond Fund aims to provide investors with low, stable returns and low risk exposure. Asset Classes and Asset Class Minimum weight Target weight Maximum weight weight ranges Australian Equities 0% 0% 0% Australian Listed Property 0% 0% 0% Australian Fixed Interest 0% 0% 0% Australian Cash 0% 0% 0% Australian Government Bonds 0% 100% 100% Cash and cash equivalents 0% 0% 100% Commencement date 5 March 2014 Rebalancing of the Funds The above ranges between the minimum weight and maximum weight are indicative only. If a Fund s exposure moves outside these ranges, we will seek to rebalance that Fund within a reasonable period of time. Changes to the Funds We may make changes to one or more of the Funds from time to time or terminate a Fund. We will provide such notice as required by the Corporations Act or constitution of the relevant Fund. Section 3 How the Funds work Each Fund is a unit trust registered under the Corporations Act as a managed investment scheme. For all Funds except the Bond Fund, each investor s investment amount is pooled and invested in the manner described in Section 2. For the Bond Fund, each investor will hold a separate class of units in the Fund. A separate government bond will be acquired for each investor and that bond and all income from it will be allocated to a separate property pool that is held on trust for that investor. Investors may acquire units in one or more Funds. A unit gives an investor a beneficial interest in the relevant Fund s assets as a whole, but not an entitlement to, or interest in, any particular asset of a Fund, except to the extent provided in respect of a class of units in the Bond Fund. 3

4 The terms of the units, including an investor s rights and obligations, are set out in this IM and each Fund s constitution (which we can provide to you on request). The constitutions 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, a resolution of the requisite number of investors must be obtained to amend the constitution. A reference in this IM to Business Day means a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Sydney. Where an event/date referred to in this IM is stated to occur on a day that is not a Business Day, then that event may occur on the Business Day which occurs either immediately before or immediately after that date. Whether the event will occur on the preceding or subsequent Business Day will depend on the specific arrangements entered into by a Fund. Unit pricing methodology The value of a unit will generally be calculated each Business Day, and will be based on the value of the relevant Fund s assets referable to the units, less liabilities referable to the units, divided by the number of units on issue. The price of units will vary as the market value of the relevant Fund s assets and liabilities rises or falls. We usually value Fund assets at their most recent market value, using independent pricing sources where available for the particular asset type. The valuation methods and policies we apply to value the relevant Fund s assets and liabilities are consistent with applicable industry standards and result in unit price calculations that are independently verifiable. We may choose not to calculate unit prices for a particular day where, for example, withdrawals from the relevant Fund or applications for units are suspended for any reason. Application and redemption prices take into account our estimate of transaction costs (the buy/sell spread). The application price and redemption price will differ to the value of a unit as a result of the buy/sell spread. See Section 6 for further details on the buy/sell spread. How to invest and access your money Making initial and additional investments Application cut-off time (Application Cut-off) 5:00pm Sydney time the preceding Business Day. For example, to invest on 31 May (assuming your Application Form has already been accepted), we must receive cleared funds from you prior to 5:00pm Sydney time on 30 May. Note we will generally process the application within five Business Days prior to acceptance Minimum initial investment amount $1,000,000 $500,000 Minimum additional investment amount Payments must be made in Australian dollars. We will not accept payments made in other currencies. The minimum initial investment amount may be waived or varied at any time by MFPML in its absolute discretion, without giving a reason. You can apply to make an initial (or additional) investment in a Fund by completing the application form accompanying this IM (Application Form) in accordance with the instructions accompanying the Application Form. You will be required to pay your investment amount on the day your application is accepted, prior to the issue of your units. Payment for fund units should be direct credited to MFPML s nominated account. Initial (and additional) investments can be made by: - Bank transfer - Real Time Gross Settlement (RTGS), and - Exigo. Additional investments can also be made at any time by paying additional cleared funds into our nominated account. We will not be responsible for any losses incurred by you as a result of the incorrect payment of funds into an incorrect bank account or as a result of funds deposited into the nominated account being applied to acquire additional units in the Funds. To assist in processing additional investments, please send notification by facsimile to Client Service prior to the relevant Application Cut-off. If you intend to make investments by Exigo, please contact Client Service so that we can register the expected receipt. There may be delays in receipt of cleared funds for each method of payment and cleared funds will not necessarily be received by us prior to any particular Application Cut-off. Where we receive an Application Form (including the required identification documents) completed to our satisfaction we will generally process the application within five Business Days, when it will be accepted by us. Once the Application Form is accepted and we received cleared funds by the Application Cut-off, Units will be issued to you on the next Business Day. If we received cleared funds from you after the Application Cut-off on a Business Day, Units will be issued to you two Business Days later, unless we otherwise agree. Investors will generally receive the application price based on the valuation of assets as at the close of business on the Business Day on which their Units are issued. We may accept or reject any application in part or in full in our absolute discretion without giving a reason. Confirmations of the number of units issued to each successful applicant will be sent to them, and to any financial adviser whose details are included in the Application Form, as soon as practicable after your units are issued. See Section 8 for more details on how to apply. 4

5 Redeeming your investments Redemption cut-off time (Redemption Cut-off) 12:00pm Sydney time each Business Day for redemption on that Business Day. Minimum remaining balance (after redemption) $500,000 For example, to withdraw on 31 May, you must submit a valid redemption request form by 12:00pm Sydney on 31 May. Investors in the Bond Fund should note that their Reference Asset has a fixed term, and that redemption prior to the Reference Asset s maturity (as stated in your transaction confirmation) is not possible due to government restrictions on its transfer or early redemption (in the event the relevant government actually permits early redemptions). MFPML may in future accept Bond Fund redemption requests prior to the relevant Bond Fund Reference Asset s maturity in its discretion. Redemption requests will generally be permitted following maturity of the relevant Bond Fund Reference Asset. For all Funds except the Bond Fund, you can request redemption of all or part of your investment in a Fund daily by submitting a redemption request form, with valid forms received by the Redemption Cut-off being processed on that Business Day. The redemption request form may be submitted via facsimile or and is available on the SIV Funds Website. The minimum redemption from a Fund is $500,000. This minimum redemption amount may be waived or varied by us in our absolute discretion, without giving a reason. Where a redemption request, completed to our satisfaction, is received we will generally process the redemption request at the end of that Business Day and if the request is accepted, pay redemption proceeds within 12 Business Days after the day on which the request is accepted. Units will be redeemed at the redemption unit price for the Business Day on which the request is accepted, which is generally based on the valuation of assets as at the close of business on that Business Day. If Bond Fund investors are permitted to redeem in future, they will also need to follow this process. Before paying you the redemption amount, we may deduct from that amount any money you owe us or a Macquarie Group company in relation to any Macquarie Group investments you hold or loans you have taken out, and any applicable amount of tax. You cannot revoke a redemption request (in whole or in part), unless permitted by us. We may pay the redemption proceeds on your units into a non-interest bearing trust account in order to facilitate payment of these amounts to your nominated account. If we are unable to credit your account for any reason these amounts may continue to be held in such a non-interest bearing trust account until you provide alternative payment instructions or we are required by law to pay these amounts to any regulatory body or other person or account. If acceptance of a redemption request would result in you holding less than the minimum balance amount specified above, we may treat the redemption request as relating to your entire holding or reject the redemption request at our discretion. The minimum balance amount may be waived or varied by us in our absolute discretion, without giving a reason. Each Fund s constitution allows us 90 days following receipt of the redemption request to pay redemption proceeds, but this period may be extended in certain circumstances (see Potential delay of redemptions below). Important note You are responsible for ensuring that you send your requests to the correct address or fax number. If incorrect contact details are used, your request may be delayed or not processed. MFPML accepts no responsibility for requests (including applications and redemptions) that have been sent to an incorrect address or fax number, including addresses and fax numbers or other parts of the Macquarie Group that are not referred to in the IM. Please call or Client Service if you would like to confirm our address or fax number. Potential delay of redemptions We may reject, in whole or in part, a redemption request in our absolute discretion. We may also delay the satisfaction of a redemption request in certain circumstances, including where we determine that it is not in the best interests of investors as a whole to make the redemption payment or where market conditions prevent us from liquidating the relevant Fund s assets in order to facilitate the redemption. Fund income Income derived by the Funds accrues daily and is generally reflected in the unit price. Distributions We will generally distribute all income, including capital gains, annually after fees at the end of June for all Funds. Distributions may occur at other times at our discretion. We will reinvest distributed income on behalf of investors as additional units in the Funds and we will not pay this distributed income to investors. To the extent that there may be other income that will be distributed to you (for example on termination of a Fund), we may pay such distributions into a non-interest bearing trust account in order to facilitate payment of these amounts to your nominated account. If we are unable to credit your account for any reason these amounts may continue to be held in such a non-interest bearing trust account until you provide alternative payment instructions or we are required by law to pay these amounts to any regulatory body or other person or account. Unit prices fall at the end of the distribution period to reflect the distributions. If you invest towards the end of a distribution period, you may find that you receive some of your capital as income. However, if your application price is calculated as at the last business day of the period, your application price will not include an income component for that period. Similarly, if you withdraw your investment towards the end of the distribution period, you will generally receive your share of any accrued income as capital. However, if your redemption price is calculated as at the last business day of the period, your redemption price will generally not include an income component for that period but you will also receive the income as part of your distribution. Income arising from securities sold to meet a significant redemption can be distributed to the redeeming investor. In these circumstances, MFPML will determine the extent to which redemption proceeds are a distribution of distributable income. MFPML's objective in making this determination is to ensure that remaining investors are not affected by any taxable income resulting from a significant redemption. There may be circumstances where there is no distributable income, for example where the management fee is greater than the income earned by a Fund. 5

6 Transferring units You may transfer units in a Fund to another person by providing us with a signed and completed standard transfer form and a completed Application Form from the current IM at that time completed by the transferee (together with all relevant identification documentation required by us). We reserve the right to decline transfer requests at our absolute discretion. Please note, where we permit a transfer of units, the transferor will not receive a distribution for the calendar month in which the transfer occurs. The distribution for the calendar month in which the transfer occurs will be payable to the transferee. A transfer of units involves a disposal of units, which may have tax implications. Stamp duty may also be payable on the transfer unless an exemption applies. You should obtain tax and stamp duty advice before requesting a transfer. Classes of units We may, in our absolute discretion, issue new classes of units at any time. New classes of units will be referable to separate property pools than those already on issue. Different classes of units may have different rights including as to fees, minimum investments, and the ability to withdraw and terms attaching to them. Switching between Funds We may, in our absolute discretion, permit investors to switch their investments from one Fund to another by providing us with written notice. We reserve the right to decline switching requests at our absolute discretion. For more information about how to switch Funds, contact us on A switch between Funds will be treated as a redemption from one Fund and a new investment in another, meaning a switch will be subject to the buy/sell spread. For more information see Section 6 of this IM. You should obtain tax and stamp duty advice before requesting a switch between Funds. Timing changes You will be notified if we change the frequency valuing the Funds, or the frequency or timing of unit pricing. Section 4 About Macquarie Financial Products Management Limited MFPML is the responsible entity of the Funds. We are responsible for the investment decisions, management and administration of the Funds. We may delegate some of these functions, including investment management functions, to third parties. MFPML is part of Macquarie Group Limited ABN and its Related Bodies Corporate (as defined in the Corporations Act) (the Macquarie Group) and holds Australian Financial Services License number , which authorises it to act as the responsible entity of the Funds. MFPML is responsible for managing the Funds in accordance with their constitutions and the Corporations Act, but may appoint third parties to assist it in performing those functions. As at the date of the IM, in addition to the Funds, MFPML acts as the responsible entity for a number of other managed investment schemes including the Macquarie Dividend Run-Up Fund offered from 2013 and Macquarie Flexi 100 Trust offered since Section 5 Risks of the Funds All investments carry risk. Different investments carry different levels of risk, depending on the investment strategy and the underlying assets. Generally, the higher the potential return of an investment, the greater the risk (including the potential for loss and unit price variability over the short term). Financial markets can be volatile, and higher levels of market volatility may result in greater risk for investors than an investment in less volatile markets. 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 level of risk that you are willing to accept will depend on a range of factors including your financial objectives, age, investment timeframe, risk tolerance, where other parts of your wealth are invested, whether your investment portfolio will be appropriately diversified after making the investment. You should only make an investment if you are prepared to accept the risks of that investment. The value of your investment and the returns from your investment will vary over time. Future returns may differ from past returns. We do not guarantee the performance or returns of any Fund and you may lose some or all of the money that you have invested in that Fund. Please note that laws affecting registered managed investment schemes may change in the future. The risks of the Funds are described below, but there could be other risks that adversely affect the Funds. You should seek your own professional advice on the appropriateness of this investment for your particular circumstances and financial objectives. Investment performance risk: The Funds will invest solely in a range of underlying assets (including publicly traded shares), and as a result, their performance will be based on the performance of those assets. If the value of these underlying assets falls, the value of your investment in a Fund may fall as well. The performance risk of an investment in the Funds is higher than an investment in a typical bank account or fixed income investment. Additionally, amounts distributed to investors may fluctuate. The Funds unit prices 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. Global economic conditions market volatility: The Funds investments are likely to have at least some positive correlation to equity markets in general. Equity markets may experience sharp declines and become more volatile, at times to very high levels over short periods of time. Investing in highly volatile conditions would imply a greater level of risk for you than an investment in more stable markets. In such circumstances, governments across the globe may make concerted efforts and undertake stimulus measures to support world economies. However, when such government measures are withdrawn, there is a possibility that the withdrawal of those stimulus actions could have an additional adverse effect on domestic and/or global economic conditions, which may in turn negatively affect the overall performance of the Funds. You should carefully consider this additional volatility risk prior to making an investment decision. Investment conditions will not necessarily be favourable to you in any particular period or over the longer term. This means the value of an investment with exposure to a particular Fund may vary to your detriment. Liquidity risk: Investments may (and in the case of the Bond Fund, are very likely to) be difficult or impossible to sell, either due to factors specific to that security, or to prevailing market conditions. Liquidity risk may mean that an asset is unable to be sold 6

7 or a Fund s exposure is unable to be rebalanced within a timely period and at a fair price, potentially resulting in delays in redemption processing, or even the suspension of redemptions. If we are required to process a large redemption or application, the exposure of a Fund to particular investments, sectors or asset classes may be altered significantly due to the security sales or purchases required. Compulsory redemptions: At any time, we may cause the redemption of some or all of your units. Circumstances where this could occur include where: (a) it is required by law; (b) any payment or reimbursement required to be made by you is not made as and when required; or (c) MFPML considers that the nature of the Investor may prejudice a Fund or the way in which it is administered. Our decision to exercise this right remains subject to our duties as responsible entity of each Fund. However, in limited circumstances where urgent action is required, this may occur before you are notified, although we will give you notice of compulsory redemption as soon as reasonably practicable after the redemption has been effected. If your units are compulsorily redeemed, we may be required by law to withhold the value of your investment in whole or in part. Significant Investor Visa compliance: One or more Funds may fail to be compliant with the Significant Investor Visa (SIV) requirements set by the Australian Government. For example, this may arise due to MFPML investing in Underlying Funds (or Bond Fund Reference Assets) that do not meet SIV requirements, the Underlying Funds (or Bond Fund Reference Assets) investing in assets outside SIV requirements, or that the SIV requirements change. Manager risk: There is no guarantee that the Funds will achieve their performance objectives, produce returns that are positive, or compare favourably against their peers. The manager of each Fund may change its investment strategies and internal trading guidelines over time, and there is no guarantee that such changes would produce favourable outcomes. Tracking error: The Underlying Funds aim to track the Reference Assets. However, they are subject to tracking error; that is, they are unlikely to perfectly replicate the performance of the Reference Asset they seek to match. Responsible entity risk: If it is necessary or desirable to replace MFPML as responsible entity for a Fund, there is no certainty that it could be replaced by a new responsible entity willing to perform our existing obligations. If a new responsible entity cannot be appointed for a Fund, it is likely that the relevant Fund will be wound up. Default risk: The repayment of capital from the Funds is not guaranteed. This means that you could lose some or all of your investment in a Fund. For example, issuers or entities upon which a Fund s investments depend may default on their obligations, for instance by failing to make a payment due on a security or by failing to return principal. Such parties can include the issuers of securities held by the Underlying Funds (or issuers of Bond Fund Reference Assets), as well as the issuers of the Underlying Funds (or Bond Fund Reference Assets) themselves. Counterparties to the Fund may default on a contractual commitment to the Fund. Counterparties may include over-the-counter derivatives counterparties, brokers (including clearing brokers of exchange traded instruments), stock lending counterparties, foreign exchange counterparties, as well as the Fund s custodian. Default on the part of an issuer or counterparty could result in a financial loss to the Fund. Valuation risk: The carrying value of a Fund s investments used to generate that 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 a Fund s unit price does not reflect the value that will be achieved when processing a redemption. No government guarantee: The Financial Claims Scheme (FCS and commonly referred to as the Australian Government Deposit Guarantee) does not apply to the Funds. Further information on the FCS can be obtained from the APRA website at and APRA hotline on Change of law and taxation: There may be changes to laws, or their interpretation, in Australia. Changes in taxation, corporate, regulatory and money laundering laws could have a negative impact on the returns to a Fund and, accordingly, returns to you. MFPML reserves the right to take steps to limit or prevent any adverse effects of changes to laws or their interpretation, including altering its investments or, if possible, restructuring a Fund. Section 6 Fees and costs The information below is intended to help you better understand the fees and costs associated with the Funds. TYPE OF FEE OR COST AMOUNT Fees when your money moves in or out of a Fund Establishment fee (the fee to open your investment) 2.2% of your initial Investment Amount Contribution fee (the fee on each amount contributed Nil to your investment) Withdrawal fee (the fee on each amount you take out Nil of your investment) Termination fee (the fee to close your investment) Nil Management costs The fees and costs for managing your investment Additional fees and charges may apply. See 'Additional explanation of fees and costs' below for further information. A Management Fee of: - for each Fund except the Cash Fund and Bond Fund, 1.027% pa, - for the Cash Fund, 0.513% pa, and - for the Bond Fund, 0.257% pa of the net asset value of the relevant Fund (inclusive of GST net of any reduced input tax credit) 1 is payable. The management fee accrues daily and is payable quarterly in arrears. It is deducted from a Fund s assets and is reflected in that Fund s unit price or distributions. 1 The Management Fee may slightly vary from year to year due to the amount of Reduced Input Tax Credits (RITCs) that the Fund is entitled to claim each year, subject to changes in GST law. We expect the Management Fee to fall between 1.027% and 1.030% for all Funds except the Cash Fund and Bond Fund, 0.513% and 0.515% for the Cash Fund and 0.256% and 0.258% for the Bond Fund. 7

8 Additional explanation of fees and costs Maximum fees we are allowed to charge The constitution for each Fund provides for the following maximum fees (exclusive of GST): a maximum establishment fee of 3.0% of the application payment; a maximum redemption fee of 5.0% of the amount withdrawn; and a maximum management fee of 5.0% pa of the Fund value. However, we have decided not to charge a redemption fee until further notice. Expense recoveries The constitution of each Fund allows all properly incurred expenses to be recovered directly from the Fund and does not place any limit on the amount of such expenses that we can recover from the Fund. Normal expenses include custody fees, registry costs, compliance committee costs, audit, accounting fees, tax consulting fees, postage and printing costs. However, we currently choose to pay normal expenses out of the management fee and do not seek a reimbursement from the relevant Fund. We are also entitled to be reimbursed from the relevant Fund for abnormal expenses, such as the cost of unitholder meetings, defending legal proceedings, special valuation of assets and the costs of terminating the relevant Fund. These abnormal expenses are not generally incurred during the day-to-day operation of the fund and are not necessarily incurred in any year. However, we do not pay these abnormal expenses out of the management fee, and if they arise, we reserve our right to deduct these expenses from the relevant Fund. Additional services and charges Transaction costs Transaction costs incurred in the acquisition or disposal of the assets of the Funds such as brokerage, clearing costs, hedging costs, transaction fees, taxes and stamp duty will generally be paid for by the Funds. The Funds may recover an estimate of these costs from unitholders applying to, or redeeming from, the Funds through the buy/sell spread Buy/Sell spread When units are acquired, a buy spread is added to the value of a unit. The buy spread is an amount which reflects the estimated transaction costs associated with acquiring the underlying investments. When units are redeemed, a sell spread is subtracted from the value of a unit. The sell spread is an amount which reflects the estimated transaction costs of disposing of the underlying investments. The buy/sell spreads are retained by the Funds and not paid to us. A buy/sell spread seeks to ensure that the estimated transaction costs of the acquisition or redemption are borne by the investor who is applying for or redeeming the units, and not by the existing investors in the Funds. The buy/sell spread may apply even if no transaction to acquire or dispose of assets is required (for example, where there is an application from one investor and a corresponding redemption by another investor), although we may at our discretion reduce the buy/sell spread in this instance. The current buy/sell spreads that may be applicable to an application or redemption from the Funds are posted on the SIV Funds Website and will vary from time to time. In certain circumstances, the buy/ sell spread may increase significantly. Notice will not usually be provided for variations to the buy/sell spread. Adviser remuneration and soft dollar payments We will pay commissions to your financial adviser in relation to your investment in the Funds. If you agree with your financial adviser for your financial adviser to be paid an Upfront Advice Fee, we will pay your adviser out of our own funds a fee of up to 2.0% (plus any applicable GST) of your Investment Amount within 60 days of the commencement of your investment in a Fund. This fee may be reduced if you and your financial adviser agree to rebate a portion of the Upfront Advice Fee, in which case we will reduce your Establishment Fee by that amount. We reserve the right not to charge the Establishment Fee. If you agree with your financial adviser for your financial adviser to be paid an Ongoing Advice Fee, we will pay your adviser out of our own funds a fee of up to 0.25% pa (plus any applicable GST) (for all Funds except the Cash Fund and Bond Fund) and up to 0.10% pa (plus any applicable GST) (for the Cash Fund) of your portion of the net asset value for the relevant Fund, payable quarterly during your investment term. The Ongoing Advice Fee is funded out of the Management Fee described below. We may enter into arrangements with financial advisers to provide non-monetary benefits to brokers and financial advisers for instance where we consider that the financial adviser has undertaken extensive marketing of the Funds. Examples of non-monetary benefits include conferences, professional development, accommodation and travel. Establishment Fee An Establishment Fee of 2.2% (including any GST) of your initial Investment Amount will be charged by us to successful applicants. As noted in Adviser remuneration and soft dollar payments above, this fee may be reduced if you and your financial adviser agree to rebate a portion of the Upfront Advice Fee that the financial adviser receives. The Establishment Fee is payable to MFPML and will not form part of the Fund assets. Management Fee The responsible entity for each Fund will receive a Management Fee equal to: % pa (for all Funds except the Cash Fund and Bond Fund); % pa for the Cash Fund; and % pa for the Bond Fund, (inclusive of GST net of any reduced input tax credit) of total net asset value of the relevant Fund. It is deducted from a Fund s assets and is reflected in that Fund s unit price or distributions. The Management Fee may slightly vary from year to year due to the amount of RITCs that the Fund is entitled to claim each year, subject to changes in GST law. For more information see footnote 1 to the table at the start of Section 6. 8

9 Related party transactions In the execution of transactions, we deal with professional organisations that may include Macquarie Group Limited or its associated companies (Macquarie Group). All transactions are conducted on arm s length terms. We can also trade the Funds investments with Macquarie Group where we believe the investments are in the best interest of investors. These organisations may receive commissions at prevailing market rates for the execution of transactions. Any conflict of interest or potential conflict of interest is managed in accordance with our Conflict of Interest Policy. The Funds may invest in a number of other funds of which a Macquarie Group company acts as responsible entity. Where another Macquarie Group company manages the underlying fund(s) you may be charged their management fees and performance fees which will be reflected in the Funds return. Other related party issues Macquarie Group is a global provider of banking, financial, advisory, investment and funds management services. The Macquarie Group s main business focus is generating returns by providing a diversified range of services to clients. The Macquarie Group acts on behalf of institutional, corporate and retail clients and counterparties around the world. MFPML, as responsible entity and manager of the Funds, generally has no control over these activities. As a result, from time to time the Funds activities may be restricted, for example due to regulatory constraints applicable to the Macquarie Group, and/or its internal policies designed to comply with such constraints. In addition, where, due to such constraints there is limited capacity to acquire particular securities, the Funds will not have priority over any member of, or any fund associated with, the Macquarie Group to acquire those securities. Change to fees and expenses We may increase the fees and expenses referred to above or introduce new fees, for example, if economic conditions or the law changes. We will provide at least 30 days notice to you of any proposed increase in fees or expenses or introduction of new fees. This notice period should give you sufficient time to withdraw from the Fund if so desired. We cannot charge more than the constitution allows, unless we obtain investors approval to do so. Under the constitution for each Fund, the maximum fees (exclusive of GST) are stated under Maximum fees we are allowed to charge earlier in this section. Section 7 How managed investment schemes are taxed MFPML does not provide financial or tax advice, nor have they obtained taxation advice specific to the offer the subject of this IM. As such, this IM cannot address all of the taxation issues which may be relevant to the Investor. The Investor must take full and sole responsibility for their investment in a Fund, the associated taxation implications arising from that investment and any changes in those taxation implications during the course of that investment. This brief summary assumes tax provisions relevant as at the date of this IM for non-residents of Australia for tax purposes. The information below is of a general nature only and does not constitute tax advice. The Investor should obtain their own independent professional taxation advice on the full range of taxation implications applicable to their own individual facts and circumstances. The Funds The Funds will generally not pay tax because the income (including capital gains) will be distributed to investors annually. Investors will pay tax on distributions from the Funds, and the extent of Australian tax payable will depend on whether the investor is a resident or non-resident of Australia for tax purposes. Resident investors Residents of Australia for tax purposes will pay tax on distributions at individual marginal tax rates. Distributions may include Australian income, capital gains and tax deferred amounts. Australian income should be included in the investor s assessable income and may include franked and unfranked dividends, interest, rental income and other profits of a revenue nature. Franking credits may be used to reduce an investor s tax liability. Tax deferred amounts should not be included in an investor s assessable income at the time of distribution, but may affect the taxable gain or loss when the investor s units are sold. Capital gains made by a Fund when assets are sold, are distributed to investors. Capital gains and losses may also be made when an investor disposes of their units in a Fund. Investors may be eligible for a capital gains tax discount made on assets held for 12 months or more. Non-resident investors Appropriate deductions of Australian tax will be made from distributions of Australian sourced income from the Fund to non-resident investors. The amounts will be withheld at the rates of tax applicable to non-residents and will depend (amongst other things) on the type of income arising to the Fund and the residence of the investor. For investors in the Bond Fund, distributions of interest from the underlying bond should generally be free from interest withholding tax. Distributions to non-resident investors on most capital gains arising to the Fund will generally be exempt from Australian income tax and distributions of those gains should generally be exempt from withholding tax. However where a Fund makes a gain on certain indirect interests in real property, non-resident investors may be subject to Australian tax on any associated gain distributed by the Fund. Where a non-resident disposes of units in a Fund, they should not generally be liable to Australian capital gains tax. Distributions which are re-invested to acquire additional units in the Fund will be treated in the same manner as cash distributions. That is, income will be re-invested net of any applicable withholding tax. 9

10 Section 8 How to apply Investors should complete the Application Form that accompanies this IM. You can send the completed Application Form and required identification documents to us by mail or facsimile. If you fax your Application Form, the original should follow in the mail for our records. Who can apply to invest? This offer is only available to Wholesale Clients, being: individuals over the age of 18 years who receive this IM in Australia; companies that receive this IM in Australia; or trustees of trusts that receive this IM in Australia (except for trustees acting in their capacity as trustees of superannuation funds), AND are Wholesale Clients as defined in section 761G of the Corporations Act. This includes investors who have provided to us an accountant s certificate which is less than two years old indicating that they have either: net assets of at least $2.5 million; or a gross income for each of the last two financial years of at least $250,000 a year. How to submit your Application Form Please submit your Application Form and any required accompanying documents (including, if required, verification of income) in either of the following two ways: Mail Mail the completed Application Form to: Client Service Macquarie SIV Funds GPO Box 4294 SYDNEY NSW 1164 Facsimile or The completed Application Form may be sent by facsimile to or to structuredinvestments@macquarie.com, with the original provided to us in the mail for our records. Please ensure that applications are sent to the address or fax number referred to in this IM. Alternatively, if we have notified you of any change in our details, please ensure that you send your application to the updated address or fax number. MFPML accepts no responsibility for applications that have been sent to an incorrect address or fax number, including addresses and fax numbers of other parts of the Macquarie Group that are not referred to in this IM. You are responsible for ensuring that you use the correct contact details and accept that if incorrect contact details are used, your application may be delayed or not processed. Please call Client Service on if you would like to confirm our address or fax number. Delays when an Application Form is incomplete As part of MFPML s obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act), AML/CTF Act, we cannot accept or process an application to invest until we are satisfied that the identity of the investor has been verified in accordance with the AML/CTF Act. Where an application is unable to be finalised for AML/CTF Act reasons or is otherwise incomplete, we will seek to contact you to obtain the missing or additional information. Your application will not be accepted by us, nor units issued to you, unless our AML/CTF Act verification has been completed or other issues have been adequately addressed to our satisfaction. Please note we may undertake further AML/CTF Act related verification after you have invested, including in relation to matters which we requested information from you in relation to prior to your investment. Failure to provide such information, or if the information provided to MFPML is not satisfactory to MFPML, may result in your investment being terminated early. If you have paid your application money, the money will be held in a non-interest bearing trust account with an Australian deposittaking instutution while we complete the AML/CTF Act verification or address the outstanding issues. If we are unable to complete the AML/CTF Act verification or other issues relating to your application are not addressed to our satisfaction or we are not able to issue units within a period of one month starting from the day on which we receive your application money (or if this is not reasonably practicable, by the end of such longer period as is reasonable in the circumstances), we will return the application money to you. We will not be liable to any prospective investor for any losses, including market movements, if an application is rejected or the processing of an application is delayed. Cooling-off period As investment in the Funds is only available to Wholesale Clients, no cooling off rights exist in relation to investments in the Funds. Enquiries and complaints We have procedures in place to consider enquiries and complaints within 45 days of receiving them. If you have any enquiries or complaints you may contact us on between 8.30am and 5.30pm Sydney time, Monday to Friday or write to us at: Macquarie Financial Products Management Limited GPO Box 4294 Sydney NSW 1164 Our procedures ensure that we deal with complaints within 45 days of receipt. 10