ARSN APIR SLT0043AU

Transcription

1 Neuberger Berman Absolute Return Multi Strategy Trust ARSN APIR SLT0043AU Product Disclosure Statement 4 May 2015 Responsible entity OneVue RE Services Limited ABN AFS licence no Investment manager Neuberger Berman Australia Pty Ltd ABN AFS licence no Trust website

2 Neuberger Berman Product Disclosure Statement 2 Before you start This Product Disclosure Statement (PDS) is an important document and you are encouraged to read it carefully. The PDS does not take into account your personal circumstances. You are encouraged to seek professional advice before investing. OneVue RE Services Limited (OneVue), is the issuer of this PDS and the responsible entity (or trustee) of the Neuberger Berman Absolute Return Multi Strategy Trust (the Trust). When we, us or our is used in this document, it is a reference to OneVue. The information in this PDS is subject to change from time to time. If a change is not of such a nature that you would be materially adversely affected by not receiving notice of it, the PDS may be updated by notice at selectfundservices.com.au and you can request a paper copy free of charge from us or your financial planner. Otherwise, this PDS will be replaced or a supplementary PDS issued.

3 Neuberger Berman Product Disclosure Statement 3 CONTENTS The Trust at a glance 4 Your checklist 5 Our team 6 How your money is managed 8 About the Trust 10 About the ARMS Fund 12 Fees and other costs 13 Risks and risk management 16 Keeping you informed 23 Tax 25 How to invest 26 How to withdraw 28 Your rights and other important issues 30 Legal 32

4 Neuberger Berman Product Disclosure Statement 4 The Trust at a glance Snapshot The Trust gives investors exposure to Neuberger Berman s Absolute Return Multi Strategy (ARMS) investment strategy through its investment in the Neuberger Berman Investment Funds plc - Neuberger Berman Absolute Return Multi Strategy Fund (the ARMS Fund). The ARMS Fund is a liquid, multi-strategy diversified alternatives solution, providing access to alternative investment strategies managed by high-quality alternative investment managers, sourced, selected and appointed by Neuberger Berman via managed accounts, and is designed to provide absolute returns. Why choose this Trust? What the Trust is exposed to See pages 10, 11 and 12 Performance objectives Many investors use this exposure to ARMS to add diversification to their existing mainstream investments. The Trust is exposed to a variety of alternative investment strategies, including long/short equity, event-driven (stressed and distressed debt, merger (risk) arbitrage and equity restructuring), capital structure arbitrage, credit long/short, asset-backed securities, managed futures, global macro and equity market neutral. The Trust aims to achieve an annualized net of fees return of 4% to 6% above the cash rate set by the Reserve Bank of Australia, with a volatility of 3% to 5% over a 3-year to 5-year time period. There is no guarantee that the performance objectives will be achieved. Level of risk over the suggested investment timeframe Suggested investment timeframe The Trust displays medium to high risk, and as part of your complete investment portfolio, can lower overall investment risk. Minimum 5 years. Trust inception 1 June Management Cost Minimum initial investment and account balance 1.05% (including net GST) p.a. of the net asset value of the Trust calculated before the deduction of any Management Costs for the period. $25,000. Minimum withdrawal $5,000 If you are investing through an administration platform, check the minimums with the operator of that service. Minimum additional investment Applications Withdrawals $5,000 If you are investing through an administration platform, check the minimums with the operator of that service. Each business day. Each business day. Distributions At least annually on 30 June and, where income is sufficient, additionally on 31 December. distributions are automatically reinvested unless you ask otherwise. Entry/exit fee Buy and Sell Spreads Unit prices None. Nil. Each business day.

5 Neuberger Berman Product Disclosure Statement 5 Your checklist This section summarises some important information, consistent with ASIC policy. You should however read the entire PDS and seek professional advice before making your investment decision. Hedge fund disclosure Summary Satisfied? For more information BENCHMARKS 1. How we value assets listed assets quoted prices unlisted assets independent valuations wherever possible 2. Periodic reporting Annual Report, and Monthly and Quarterly updates are available from Page 10 Page 11 DISCLOSURE PRINCIPLES 3. What we invest in Via a diversified portfolio of investment strategies, in a broad range of investments, including equity securities, debt securities, bank deposits, asset backed securities, financial derivative instruments and commodity indices 4. Who is responsible responsible entity OneVue investment manager Neuberger Berman Australia 5. Fund structure unlisted Australian unit trust registered with the ASIC Page 10 Page 6 Page Valuation, location and custody of assets unit price calculation is undertaken by State Street Australia, independent of OneVue and Neuberger Berman Australia assets are held by State Street Australia Page Liquidity applications and withdrawals are processed daily the Trust targets liquidity matched to the ARMS Fund 8. Leverage direct borrowing is limited underlying investments of the ARMS Fund can be leveraged Page 12 Page Derivatives and structured products derivatives are used by the ARMS Fund where considered appropriate both for risk management and to gain investment exposures Page Short selling the ARMS Fund and underlying investments can use short selling Page Withdrawals daily Page 28

6 Neuberger Berman Product Disclosure Statement 6 Our team Snapshot The Trust gives investors exposure to Neuberger Berman s Absolute Return Multi Strategy (ARMS) investment strategy through its investment in the Neuberger Berman Investment Funds plc Neuberger Berman Absolute Return Multi Strategy Fund (the ARMS Fund). OneVue RE Services Limited (OneVue) is responsible for the operation of the Trust and has appointed Neuberger Berman Australia Pty Ltd (Neuberger Berman Australia) to the role of investment manager for the Trust. Neuberger Berman Australia Neuberger Berman Australia is a proprietary limited company incorporated in Australia. It operates under an Australian financial services licence and is a wholly-owned subsidiary of Neuberger Berman Group LLC (collectively referred to together with its subsidiaries and affiliates, including Neuberger Berman Australia and NB Alternative Investment Management LLC (NB Alternatives), as Neuberger Berman). Founded in 1939, Neuberger Berman is one of the world s leading independent, private, employee-controlled asset management groups and partners with institutions, intermediaries and individuals worldwide to customise solutions that address their needs for income, growth and capital preservation. The firm provides a broad range of global investment solutions across equities, fixed interest and alternative investment strategies to investors through customised separately managed accounts and pooled funds. As of 31 March 2015, Neuberger Berman s assets under management were circa US$251 billion. Founder Roy Neuberger s legacy respect for independent thinking, focus on research and emphasis on capital preservation helped establish the firm in the industry and continues to guide its approach to investing. Today, approximately 2,000 professionals focus exclusively on asset management for institutions and individuals both directly and through intermediaries. Their offices span the globe from New York to London to Melbourne. Neuberger Berman s distinctive characteristics include: an independent, private global asset management firm employee-controlled exclusively focused on asset management offering investment solutions across equities, fixed income and alternative strategies experienced portfolio managers averaging 28 years of experience deeply grounded in fundamental, bottom-up research and an investment culture of independent thinking, leading to the delivery of value to clients, and an Australian presence, with regular visits from Neuberger Berman professionals to Australia. Neuberger Berman Australia s primary role is to make available Neuberger Berman s investment strategies to wholesale investors in the Australian market and to provide certain financial services relating to such strategies. NB Alternatives NB Alternatives, a wholly-owned subsidiary of Neuberger Berman Group LLC and registered with the U.S. Securities and Exchange Commission as an investment adviser, houses Neuberger Berman s Hedge Fund Solutions team and is the sub-investment manager of the ARMS Fund. The team consists of more than 35 individuals, and operates in conjunction with separate Neuberger Berman risk management and operational due diligence teams. Neuberger Berman s Hedge Fund Solutions team is led by 5 dedicated investment professionals, who also constitute NB Alternatives investment committee, and has been managing hedge fund solutions since OneVue OneVue is the responsible entity for the Trust, responsible for its operation in accordance with the Trust s constitution, the Corporations Act and trust law. Founded in December 2002, OneVue is a professional responsible entity and a wholly owned subsidiary of OneVue Holdings Limited (ASX: OVH), an ASX listed company. As at 31 March 2015, the OneVue group had retail funds under administration of more than $2.8 billion. For more information about OneVue, visit

7 Neuberger Berman Product Disclosure Statement 7 Our team Regulatory and contractual information There have been no adverse findings (significant or otherwise) against Neuberger Berman Australia, OneVue, or any of the senior investment professionals at these organisations. OneVue has appointed Neuberger Berman Australia via an arm s length investment management agreement. There are no unusual or materially onerous provisions in that agreement. It can be terminated in appropriate circumstances, for example insolvency and material un-remedied breach. There are no termination fees payable, although the agreement does have a minimum term.

8 Neuberger Berman Product Disclosure Statement 8 How your money is managed Access to high-quality alternative investment managers The Trust provides investors with exposure to Neuberger Berman s ARMS Fund. The ARMS Fund allocates assets via managed accounts to multiple third-party discretionary investment managers (the Sub-Advisers ) that employ a variety of alternative investment strategies and which have been selected by Neuberger Berman using fundamental research and analysis. The Sub-Advisers are high-quality alternative investment managers with long histories of managing active alternative investment strategies typically unavailable to many investors. Active management Neuberger Berman utilises a dynamic, iterative process, which incorporates both detailed analysis of alternative investment strategies, in order to determine where assets should be allocated, and fundamental analysis of alternative investment managers, which includes sourcing, screening, undertaking due diligence and monitoring, in order to determine the sub-advisers to be selected for the relevant strategies. None of OneVue, Neuberger Berman Australia or Neuberger Berman take into account labour standards or environmental, social or ethical considerations in the selection, retention or realisation of investments for the Trust. Why diversification is important The Trust is exposed (via the ARMS Fund) to a diverse range of alternative investment strategies managed by the Sub-Advisers. As such, the Trust can offer an investor important diversification benefits when forming part of an investor s overall portfolio. Diversification is believed to be important in lowering overall portfolio volatility and the extent of any reduction in value that can occur from time to time when mainstream investments experience market corrections. Why alternative investments are important Through the ARMS Fund, the Trust may be exposed to a broad range of alternative investments, including: equity securities, debt securities, bank deposits, asset-backed securities, financial derivative instruments and commodity indices, as well as some cash. Alternative investments can include: hedge funds, managed futures, private equity, commodities, infrastructure, and gold and other precious metals. Alternative investment strategies include investing in mainstream markets, but in non-traditional ways. For example, a Sub-Adviser managing a long/short equity strategy may be able to short equities, allowing it to profit when equities fall in value. See the Risks and risk management section of this PDS below on page 16. Alternative investments are becoming more mainstream and evidence shows that many seasoned investors are including alternative investments in their portfolios. Alternative investments are seen as important because they can provide different sources of returns, returns that can behave differently or are lowly correlated with those investments traded in more mainstream markets. Due diligence The Trust generates returns though its exposure to the alternative investment strategies managed by the Sub-Advisers and by Neuberger Berman s active asset allocation decisions between the Sub-Advisers and the various alternative investment strategies that is, a top down, bottom up process. Neuberger Berman conducts extensive due diligence on, and on-going monitoring of, the Sub-Advisers and will review a range of qualitative and quantitative factors when determining or reviewing the allocations to such Sub- Advisers, including each Sub-Adviser s investment style and historical performance, and the holdings in the Sub-Adviser s allocated assets.

9 Neuberger Berman Product Disclosure Statement 9 How your money is managed Due diligence is the process of asking questions and undertaking research to gain a sufficient level of comfort prior to giving advice or making an investment. Neuberger Berman s due diligence process includes a review of the investment strategy, the Sub-Adviser and in-depth operational and business risk due diligence. In certain circumstances Neuberger Berman may also verify the relationships of important underlying service providers such as administrators prior to making an investment. OneVue also conducts due diligence on the Trust s own custodian and administrator, and this can include service reviews and service level meetings. Such reviews are conducted at least annually. Who holds the assets? OneVue has appointed State Street Australia Limited ACN as custodian and administrator of the Trust (State Street Australia). State Street Australia has overall responsibility for custody of the assets of the Trust, although it may appoint sub-custodians from time to time. State Street Australia is not responsible for the investment management of the Trust and has not caused the issue of this PDS. OneVue maintains a custody and an administration agreement with State Street Australia which has certain limits on the liability of State Street Australia. OneVue periodically reviews State Street Australia s compliance with the service level agreement which includes meeting at least annually with State Street Australia. The custodian for the ARMS Fund is Brown Brothers Harriman Trustee Services (Ireland) Limited. Brown Brothers Harriman Fund Administration Services (Ireland) Limited has been appointed as the ARMS Fund s administrator with responsibility for, among other things, the calculation of that fund s net asset value. Who is the auditor? OneVue has appointed EY as the auditor of the Trust. EY is not responsible for the investment management of the Trust and has not caused the issue of this PDS. Related parties? OneVue is not affiliated or legally related in any other way to any member of Neuberger Berman, including Neuberger Berman Australia and NB Alternatives. In any case, any fees payable to Neuberger Berman Australia are on at least arm s length terms. Neither OneVue nor Neuberger Berman Australia is affiliated to other key service providers to the Trust, including, for example, State Street Australia or EY, except that our Unit Registry provider, OneVue Fund Services Pty Limited, is part of the same corporate group as OneVue.

10 Neuberger Berman Product Disclosure Statement 10 About the Trust Why use the Trust? The Trust is a diversified alternatives solution for investors and advisers who are looking for a core global alternative investments allocation to compliment a mainstream investment portfolio. The Trust has one unit class, which is open for investors with a minimum account balance of $25,000 (if you are investing through an administration platform, check the minimums with the operator of that service). Benefits This Trust is designed to help investors by aiming to provide: absolute returns, diversification, low volatility, low sensitivity to broad equity and fixed income markets, lower fees when compared to many similar funds, access to a diversified range of alternative investment strategies typically unavailable to many investors, and daily liquidity. What the Trust invests in The Trust invests in the ARMS Fund. Although the Trust s investment into the ARMS Fund is denominated in Australian dollars, the underlying investment strategies of the ARMS Fund may be exposed to other currencies, including USD, Euros, British Pounds and Japanese Yen. Hedging of currency exposure within an underlying investment strategy is the responsibility of the respective Sub-Adviser. Performance objectives The Trust aims to achieve an annualized net of fees return of 4% to 6% above the cash rate set by the Reserve Bank of Australia, with a volatility of 3% to 5% over a 3-year to 5-year time period. Please remember that these objectives cannot be guaranteed, forecast or promised. For performance of the Trust, please speak to your professional adviser or visit the Trust s website. Valuation of assets OneVue maintains a unit pricing policy for the valuation of Trust assets. A copy is available to unit holders on request. The way in which assets are valued can impact on the value OneVue gives to the Trust and this impacts on the value of units. The constitution generally allows OneVue to determine the methods by which it calculates the value of the assets. Generally, the valuation of assets occurs as frequently as issue prices are determined. OneVue uses valuations for the ARMS Fund provided by the ARMS Fund s independent administrator. None of OneVue or Neuberger Berman or any person who assists them may have sufficient information to confirm or review the completeness or accuracy of such information. In the event that a valuation estimate subsequently proves to be incorrect, no adjustment to any previously published net asset value of the Trust is made nor would any compensation be payable in respect of such error. In practice, OneVue outsources the calculation of the Trust s unit price to its custodian State Street Australia. Leverage Any direct borrowing (or leverage) in the Trust is limited: from time to time amounts may be borrowed on an interim basis to meet redemptions, distributions, or short term Trust obligations, and then only if the borrowing is considered to be prudent and in the best interests of all investors. Such borrowing is only from leading banks. Security may be granted over Trust assets. Whilst some alternative investment strategies use very little or no leverage, others can utilise leverage, and at times the Trust will have exposure through the ARMS Fund to underlying investment strategies which are or can be leveraged.

11 Neuberger Berman Product Disclosure Statement 11 About the Trust Derivatives The Trust does not use derivatives or other financial instruments. Regular reporting We will report to you at least annually on key investment matters, including: allocation to asset type, liquidity profile, and leverage ratio. Please see the Keeping you informed section on page 23 for further explanation of reporting. The investment strategy could change. If a change is not of such a nature that you would be materially adversely affected by not receiving notice of it, the PDS may be updated by notice at the Trust s website and you can request a paper copy free of charge from us or your financial planner. Otherwise, this PDS will be replaced or a supplementary PDS issued, and we would give you reasonable advance notice. Who does what? The main organisations involved with the Trust are shown here: Investment manager Responsible entity Custodian Investments Neuberger Berman Australia OneVue RE Services Limited The Trust State Street ARMS Fund $ Investors Sub-Advisers

12 Neuberger Berman Product Disclosure Statement 12 About the ARMS Fund Fund Structure The ARMS Fund is a sub-fund of Neuberger Berman Investment Funds plc ( NBIF ), an investment company with variable capital constituted as an umbrella fund with segregated liability between sub-funds under the laws of Ireland and authorised by the Central Bank of Ireland pursuant to the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations 2011 (UCITS). The ARMS Fund was established on 31st October Neuberger Berman Europe Limited is the investment manager of NBIF and has appointed NB Alternatives as the sub-investment manager of the ARMS Fund. NB Alternatives is focused on alternative investment strategies such as those used by the ARMS Fund. NB Alternatives is responsible for selecting each Sub-Adviser to which assets will be allocated and for determining the amount of the ARMS Fund s assets to allocate to each. The Sub-Advisers employ a variety of alternative investment strategies, including long/short equity, event driven (stressed and distressed debt, merger (risk) arbitrage and equity restructuring), capital structure arbitrage, credit long/short, asset-backed securities, managed futures, global macro and equity market neutral; and NB Alternatives will allocate to those Sub- Advisers whose strategy it believes, when combined to form a single portfolio, can provide attractive riskadjusted returns over the long term. The ARMS Fund uses a managed account structure, the control of which, and transparency into, is, importantly, maintained by Neuberger Berman. Liquidity The ARMS Fund aims to provide daily liquidity. Whilst Neuberger Berman conducts research and due diligence on the underlying investment liquidity, underlying investments may not be able to be realised in a timely way. Neuberger Berman aims to manage this risk as far as is practicable by carrying out research on underlying investments, monitoring liquidity levels and seeking to ensure it has, or anticipates having access to, liquid assets. Leverage The ARMS Fund can utilise leverage according to the laws of Ireland and the UCITS Regulations 1. The global exposure (as prescribed by UCITS) relating to Financial Derivative Instruments (FDIs) must not exceed its total net asset value. UCITS regulations include particular restrictions on the use of FDIs. Due to the implicit leverage of individual FDIs, value at risk for individual positions can be higher. Additionally, the ARMS Fund s global exposure is subject to an advanced risk management process which, in compliance with the UCITS regulations, aims to ensure that on any day the absolute amount that can be lost (according to statistical risk management techniques) is limited. Please see the Risks section on page 16 for further explanation of risk associated with borrowing or leverage. Derivatives The ARMS Fund uses derivatives and other financial instruments. Investment in Financial Derivative Instruments (FDIs) by the ARMS Fund is subject to the conditions and limits laid down by the Central Bank of Ireland. The ARMS Fund may invest in over-the-counter (OTC) derivatives provided that the counterparties to OTC transactions are institutions subject to prudential supervision and belong to categories approved by the Central Bank of Ireland. Please see the Risks section on page 16 for further explanation of risk associated with financial instruments. 1 The Undertakings for Collective Investment in Transferable Securities, a set of European Union Directives that aim to allow collective investment schemes to operate freely throughout the European Union on the basis of a single authorisation from one member state.

13 Neuberger Berman Product Disclosure Statement 13 Fees and other costs DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on long term returns. For example, total annual fees and costs of 2% of your Portfolio balance rather than 1% could reduce your final return by up to 20% 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 the Trust or your professional 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 ( has a managed investment fee calculator to help you check out different fee options. This section shows fees and other costs that you may be charged. These fees and other costs may be deducted from your money, from the returns on your investment, or from the Trust s assets as a whole. Taxes are discussed on page 25. You should read all of the information about fees and costs, because it is important to understand their impact on your investment in the Trust. These fees and other costs are inclusive of Goods and Services Tax (GST). Type of fee or cost Amount How and when paid Fees when your money moves in or out of the Trust Establishment fee The fee to open your investment. Contribution fee The fee for each amount contributed to your investment. Withdrawal fee The fee for each amount you take out of your investment. Termination fee The fee to close your investment. Nil Nil Nil Nil Not applicable Not applicable Not applicable Not applicable Management Costs These are the fees and costs for managing your investment. Management Costs The ongoing cost payable for managing your investment. Service Fees Investment switching fee The fee for changing investment options. 1.05% p.a. (including net GST) of the net asset value of the Trust calculated before the deduction of any Management Costs for the period. Nil This fee is deducted from the Trust before each unit price is determined, accrued daily and paid monthly in arrears. This fee may be negotiable for wholesale clients. Not applicable Additional fees and costs may apply if you are investing via an administration platform.

14 Neuberger Berman Product Disclosure Statement 14 Fees and other costs Additional explanation of fees and costs Management Costs This is the fee charged primarily in relation to the investment management of the Trust. Investors pay management fees and administration fees but do not pay performance fees in the Trust or at the ARMS Fund level. The Management Costs are charged primarily for managing the assets of the Trust, but also include the Normal Expenses as set out below. For a worked dollar example, please refer to the Example of annual fees and costs on page 15. Normal Expenses All Normal Expenses of the Trust are paid from the Management Costs. Normal Expenses for the Trust include all the usual expenses associated with the Trust (including establishment, promotion, licensing, responsible entity fees, custodian, registry, audit, taxation advice, external consultants, accounts, stationery, postage, compliance and compliance committee costs, fund accounting and operations costs, insurance costs and regulatory expenses, as well as any GST impact on these services). It does not include investment expenses such as brokers, legal or due diligence costs for any particular investment, investment transaction costs or unusual expenses such as investor meetings, dispute management, platform listing costs, change of responsible entity or termination of the Trust, as well as any GST impact on these services, which if they arise may be recovered from the Trust. For a worked dollar example, please refer to the Example of annual fees and costs on page 15. Other payments and commissions Subject to the law, OneVue may share its fees with others. These payments are entirely from its own resources and are not an additional fee paid by investors. OneVue has a register of alternative remuneration of $300 or more paid to (and received from) financial service licensees and advisers. You can inspect this during business hours. We look after employees OneVue and Neuberger Berman Australia employees are at the heart of each business and we can choose not to charge staff, and those people associated with them, Investment Management Fees on their investments, as permitted by ASIC policy. Administration platform fees There may be additional fees payable to an administration platform operator to make the Trust available. If you are investing in the Trust via an administration platform there may be fees charged for this service. You should refer to the administration platform guide, or ask your professional adviser about the fees they might charge you or be paid. Large investments Very large investors are important to any investment management business. Large amounts provide buying power, for example, from which all investors benefit. We can choose not to charge large investors some or all fees on their investments, or may pay them some of its own fees. ASIC regulates how this can be done. They may contact OneVue as to eligibility. It is not permitted to enter into individual fee arrangements with investors who are not wholesale clients as the Corporations Act defines this. Changes in fees and costs Although our aim is to keep fees and costs constant and competitive, they can change. You will be given at least 30 days prior notice of any increase. In any case, the maximum fees that may be charged are in the constitution. To change the constitution to increase maximum fees requires investor approval.

15 Neuberger Berman Product Disclosure Statement 15 Fees and other costs Bank and government charges All government fees, duties and bank charges will apply to your applications and withdrawals as appropriate. Tax The fees and other costs in the Fees and other costs table take into consideration the net effect of GST (including the benefit of reduced input tax credits). For additional information regarding tax, please refer to page 25. Example of annual fees and costs: This table gives an example of how the fees and costs for the Trust can affect your investment over a one year period. You should use this table to compare the Trust with other managed investment products. This example is based on an average balance of $25,000 with a contribution of $5,000 during the year. EXAMPLE BALANCE OF $25,000 WITH A CONTRIBUTION OF $5,000 DURING YEAR Contribution fee Nil For every additional $5,000 you put in, you will be charged $0 PLUS Management Costs 1.05% p.a. And, for every $25,000 you have in the Trust you will be charged $ each year. EQUALS Cost of the Trust If you invest $5,000 during the year your average balance was $25,000 over the course of the year, then for that year you will be charged estimated Management Costs up to: $262.50* What it costs you will depend on the fees you negotiate with the Trust or your professional adviser. About the examples There are a few things to keep in mind when considering this example: it assumes that fees are applied to a balance of $25,000 over the course of the year (and the Trust s unit price does not change during the year), the figures above do not reflect all indirect costs (costs related to a specific asset or activity to produce income that an investor would incur if he or she invested directly in the assets are not included in the Management Costs. Such costs include the fees paid to the Sub-Advisers and other administrative and operating costs of the ARMS Fund; and are reflected in the value of the Trust s investment in the ARMS Fund. The exact fees paid to Sub-Advisers are confidential, but will not exceed 1.5% and, in aggregate, are generally expected to average approximately 1%. The Sub-Advisers are not paid a performance fee.) it assumes that no unusual expenses are incurred or bank or government charges apply (these may increase costs). Details of how each of these fees are calculated is set out above. Numbers may not add exactly due to rounding.

16 Neuberger Berman Product Disclosure Statement 16 Risks and risk management Risk is a part of investing All investments are subject to varying risks, and the value of your investment will rise and fall over time. Changes in value can be significant and they can happen quickly the greater and faster the changes the greater the volatility. As a general rule, the higher the potential returns, the higher the level of risk. The impact of particular risks on the Trust will differ in degree depending on the underlying investments and asset allocation strategy. Different types of investments have different risk characteristics which will affect investment performance. Neither the performance of your investment, nor capital invested in the Trust, is guaranteed. As risk cannot be entirely avoided when investing, the philosophy employed for the Trust is to identify and manage risk as far as is practicable. In practice, risk management happens at the ARMS Fund level in accordance with the statement of risk management process and procedures applicable to the fund. Neuberger Berman cannot promise that the ways in which it aims to manage risk will always be successful and, if certain risks transpire, your distributions and the value of your investment could be adversely affected. A statement of the risk management process employed by Neuberger Berman in respect of the ARMS Fund has been submitted to and cleared by the Central Bank of Ireland. On request, supplementary information relating to any risk management methods employed by Neuberger Berman in respect of the ARMS Fund, including the quantitative limits that are applied, and any recent developments in the risk and yield characteristics of the underlying investments of the ARMS Fund, can be provided. The risks associated with the Trust Significant risks associated with investments in the Trust are discussed below. Fund performance depends on, amongst other things, the impact of these risks. Achieving the performance objective assumes these risks are managed as far as is practicable, and risks that cannot be managed do not have a significant adverse impact on performance. This list is not all encompassing and if an investor has any doubts regarding their investment they should contact an appropriately qualified professional. The following risks are general risks associated with managed investments: Investment What is investment risk? This is the risk that the value of the ARMS Fund or a sub-account within it may change in value or become more volatile, potentially causing a reduction in the value of the portfolio and increasing its volatility. Reasons can be many, and include changes in an investment s operations, management or business environment, or what people think of the investment. How is this addressed? Neuberger Berman chooses and monitors the Sub-Advisers carefully, and uses its discretion to make changes when appropriate. The ARMS Fund is diversified across multiple Sub-Advisers which typically follow different investment strategies and objectives.

17 Neuberger Berman Product Disclosure Statement 17 Risks and risk management Market What is market risk? Market risk is the risk that an entire market, a sector (for example banking or technology), a country or an economy changes in value or becomes more volatile, including the risk that the purchasing power of the currency changes (either through inflation or deflation), potentially causing a reduction in the value of the portfolio and increasing its volatility. Reasons can be many, and include changes in economic, financial, technological, political or legal conditions, natural and man-made disasters, conflicts and changes in market sentiment. How is this addressed? Neuberger Berman monitors markets globally, as it considers appropriate and practicable, undertaking their own research as well as analysing leading market research, and using sophisticated tools to model the ARMS Fund s behaviour under various conditions. The ARMS Fund can be diversified across markets and is repositioned strategically by Neuberger Berman using their discretion. The Trust s returns may deviate from overall market returns to a greater degree than other managed funds that do not employ an absolute return focus. Thus, the Trust might not benefit as much as funds following other strategies during periods of strong market performance. Also, the employment of hedging strategies, if any, in an attempt to mitigate risk may cause the Trust s returns to be lower than if hedging had not been employed. Borrowing What is borrowing or leverage risk? This is the risk associated with borrowing (or gearing or leverage), particularly that borrowing (both direct borrowing or indirect borrowing using derivatives) magnifies both good and bad returns. Also the inability to borrow as and when needed, and a lender who suffers financial problems, can adversely affect the Trust. How is this addressed? The Trust does not borrow to enhance investment returns. Any direct borrowing in the Trust is limited: from time to time amounts may be borrowed on a short term basis to meet redemptions, distributions, or short term Trust obligations, and then only if the borrowing is considered to be prudent and in the best interests of all investors. Such borrowing is only from leading banks. Security may be granted over Trust assets. Whilst some of the alternative investment strategies to which the ARMS Fund allocates assets are expected to operate generally at lower levels of leverage, others can utilise leverage, and at times the ARMS Fund will have exposure to underlying investments which are leveraged. Neuberger Berman monitors any leverage levels used. It needs to be remembered that borrowing in any form increases the potential return and also the potential loss. In a little more detail, borrowing magnifies profits when the returns from the asset more than offset the costs of borrowing, but losses are magnified when the opposite is true when the costs of borrowing more than offset returns from the asset. For example, if the Trust has assets of $100 and it borrows $10 to satisfy a payment request pending return of $10 from an underlying redemption then the Trust has borrowed 10% of its assets. If the underlying redemption is not paid then the Trust still has to repay the $10 (plus interest) that it borrowed. This would mean the Trust has made a loss of $10 (plus interest). It is important to note that the Trust does not intend to borrow to speculate on investments.

18 Neuberger Berman Product Disclosure Statement 18 Risks and risk management Financial instruments What is financial instruments risk? This is the risk associated with using sophisticated financial instruments such as derivatives, including swaps and options. Risks associated with using these tools include the value of a derivative failing to move in line with the underlying asset, potential illiquidity of a derivative, the Trust, the ARMS Fund (or the underlying investment) not being able to meet payment obligations as they arise, potential leverage (or gearing) resulting from the position and counterparty risk. (counterparty risk is where the other party to the derivative cannot meet its obligations). How is this addressed? The Sub-Advisers managing the investment strategies underlying the ARMS Fund may use derivatives where it is considered appropriate to reduce risk or to gain exposures to certain types of assets. Neuberger Berman employs a risk management methodology which aims to measure, monitor and manage various risks associated with the use of derivatives. If the use of a financial instrument has a collateral requirement, Neuberger Berman monitors that collateral requirement. The market exposures created by individual derivatives positions are monitored frequently and they may be adjusted to maintain appropriate exposures. Using derivatives to reduce Trust risk is not always successful, is not always used to offset all relevant Trust risk, and is sometimes not cost effective or practical to use. Interest rates What is interest rate risk? This is the risk that changes in interest rates can have a negative impact on certain investment values or returns. Reasons for interest rates changes are many and include changes in inflation, economic activity and Central Bank policies. How is this addressed? Neuberger Berman s risk management tools enable analysis of interest rate risk in the ARMS Fund. Neuberger Berman considers the level of interest rate exposure when assessing overall portfolio strategy and risk. Inflation What is inflation risk? This is the risk that increases in inflation will undermine the performance of the various investment markets in which the Trust invests. As noted above inflation can also have an effect on Central Bank policies. Reasons for inflation are varied. Some reasons can include (but are not limited to) growth of the money supply and the rising costs of raw materials, labour and/or production. How is this addressed? Neuberger Berman monitors inflation rates in key economies that could impact on the Trust.

19 Neuberger Berman Product Disclosure Statement 19 Risks and risk management Currency What is currency risk? This is the risk that changes in the value of currencies can have a negative impact on returns. This risk arises because investments which are based overseas or which are exposed to other countries are often denominated in other currencies. The investments can be denominated in Australian dollars, Euros, British Pounds, Japanese Yen or other major currencies. When currencies change in value relative to one another, the value of investments based on those currencies can change as well. Although the share class of the ARMS Fund into which the Trust invests will be denominated in Australian dollars, the underlying investments of the ARMS Fund can be in USD or other currencies. Currency hedging of this exposure within the ARMS Fund is the responsibility of Neuberger Berman. The Sub-Advisers may aim to hedge currency risk. This involves some financial arrangement designed to offset changes in currencies. Sometimes derivatives can be used for this purpose. Unfortunately hedging is not perfect. It is not always successful, is not always used to offset all currency risk, and is sometimes not cost effective or practical to use. How is this addressed? To the extent it is considered appropriate and practicable, the Sub-Advisers may hedge some foreign currency risk from time to time. But in spite of some potential hedging from time to time, currency risk remains and currency movements may have both a positive and negative impact on the Trust. Liquidity What is liquidity risk? This is the risk that your withdrawal requests cannot be met when you expect. Cash is paid to your account when you withdraw, and as such investments in the Trust may need to be sold to pay you. Depending on factors such as the state of the markets, selling investments is not always possible, practicable or consistent with the best interests of investors. Alternative investments can at times be illiquid. This means that at times the ARMS Fund, and in turn the Trust, Trust may have difficulties in liquidating the underlying investments in accordance with stated liquidity objective. This is also one of the reasons why the constitution for the Trust specifies limited circumstances where there could be a delay in meeting your withdrawal requests. The law sometimes restricts withdrawals. How is this addressed? OneVue seeks to meet withdrawal requests soon after the Trust receives them; the ARMS Fund processes redemptions daily (taking into account certain international business days when the ARMS Fund may not be open for business). (see page 28). Neuberger Berman aims to manage this risk as far as is practicable by monitoring the investment strategies and instruments underlying the ARMS Fund and seeking to ensure there are, or will be, enough liquid assets for when it is anticipated they would normally be needed.

20 Neuberger Berman Product Disclosure Statement 20 Risks and risk management Structure What is structure risk? This is the risk associated with investing into managed fund structures. Risks associated with investing in the Trust include that: it could be terminated; there can be changes in the responsible entity, our chosen investment manager or our chosen investment adviser (or in investment and management teams or key relationships): the investment strategy can change; someone involved with your investment (even remotely) may not meet their obligations or perform as expected; assets may be lost, not recorded properly or misappropriated; laws may adversely change; insurers may not pay when expected; or, insurance may be inadequate. The Trust will invest in the ARMS Fund and its performance will be driven by the performance of the ARMS Fund. Investment decisions, although taken carefully, are not always successful. Investing through an administration platform also brings some risks that the operator of the administration platform may not perform its obligations properly. Investing in the Trust may give inferior results compared to investing directly (for example you avoid the impact of others coming and going and may be able to manage your tax situation better). How is this addressed? Neuberger Berman employees and related funds can be invested alongside your investments creating an alignment of interest between investors. Additionally rather than using a fund of funds approach Neuberger Berman uses subaccounts that remain in its control and held in accordance with European Union regulations. This means Neuberger Berman always has transparency and importantly exercises ultimate control of the accounts where the assets are held.. Short Sale Risk What is short sale risk? The investment strategies underlying the ARMS Fund can use techniques that provide similar results to short sales. Short sales are important as they can generate performance in declining markets or provide a hedge to long market exposure. Short sales involve selling a security a fund does not own in anticipation that the security s price will decline. Short sales may help hedge against general market risk to the securities held in a portfolio but theoretically present unlimited risk on an individual stock basis, since the underlying investment fund may be required to buy back the security sold short at a time when the security has appreciated in value. Neuberger Berman uses its knowledge in investing in alternative investments to evaluate and monitor the short positions that may be established by the investment strategies underlying the ARMS Fund. The ARMS Fund can utilise short selling techniques via the use of Financial Derivative Instruments (FDIs). Investment in FDIs by the ARMS Fund is subject to the conditions and limits laid down by the Central Bank of Ireland. Event Risk What is event risk? Some underlying investment funds may utilise event driven strategies. Event driven investing means investing in companies in anticipation of an event such as a merger or an acquisition. Event driven investing requires skill and can provide good risk adjusted performance. The risk that the event does not go ahead could expose the Trust to losses.

21 Neuberger Berman Product Disclosure Statement 21 Risks and risk management Credit Risk CTA Risk Information risk What is credit risk Underlying investment funds can utilise strategies involving the credit or debt markets. Credit markets are accessed to provide diversification from exposure to stock markets (or equities). As these credit strategies (such as bonds or loans) depend on the ability of borrowers to repay their debts any downgrade or default affecting any of the underlying investment funds securities could result in Trust losses. What is CTA Risk? Commodity trading advisers (or CTAs) are managers that trade commodity, futures and other liquid markets. There is evidence to suggest these strategies can perform well in declining stock markets or where there is a great deal of market volatility. Their success largely depends upon the ability of the selected managers to assess correctly the future course of price movements of financial instruments and markets and a great deal of skill and technology is required to generate returns. However, the future is always uncertain and as such returns in these strategies can be, at times, very volatile. What is information risk? We are committed to ensuring that your information is kept secure and protected from misuse and loss and from unauthorized access, modification and disclosure. We use the internet in operating the Fund, including that records may be stored in the cloud. If stored overseas, different privacy and other standards may apply there. Our Privacy Policy is discussed below. The internet does not however always result in a secure information environment and although we take steps we consider reasonable to protect your information, we cannot absolutely guarantee its security. Risk rating The return profile of the Trust gives it a medium to high risk profile, and a minimum investment timeframe of 5 years is recommended. Neuberger Berman Australia considers that the standard risk measure appropriate for this Trust is a medium risk rating, which means that the estimated number of negative annual returns over any 20 year period is 3 to less than 4. On a scale of 1 to 7 where 7 is riskiest in this respect, the Trust is in category 3. The standard risk measure is based on industry guidance to allow investors to compare investment options that are expected to deliver a similar number of negative annual returns over any 20 year period. It is not a complete assessment of all forms of investment risk, for instance it does not detail what the size of a negative return could be or the potential for a positive return to be less than an investor may require to meet their objectives. Further, it does not take into account the impact of fees and tax on the likelihood of a negative return. Investors should still ensure they are comfortable with the risks and potential losses associated with the Trust. How risks are managed Whenever investments are made, the potential for returns in light of the likely risks involved are carefully assessed. Risk is considered at every stage and level of the investment process. As far as is practicable, risk is managed at both the individual investment and the Trust level, both pre-investment and post-investment, and equal emphasis is placed on the portfolio construction and the portfolio management processes.