Performance figures, including the value of franking credits, are presented both gross of fees and net of fees. While the fund is likely to hold a significant proportion of its investments in microcap stocks outside of the S&P/ASX Small Ordinaries Accumulation Index, the performance of this index is shown for comparative purposes only.

The Fund commenced investing on 23rd December 2011.

As at 31 December 2016. Fund Performance is presented after fees and costs and inclusive of the value of franking credits. Past performance is not an indicator of future performance.

The Fund holds a concentrated portfolio of ASX listed small cap securities (“microcaps”) that are selected using a value orientated “best ideas” investment philosophy. Investments are likely to be in small companies with the majority selected from outside the top 300 listed securities.




Investment Philosophy


Microcaps typically have little analyst coverage as institutions are unable to deploy meaningful amounts of capital and therefore cannot justify investing in research. This means many companies outside the main ASX indices are under-researched and undiscovered. This can give rise to situations where companies trade well below our assessed value. We seek to identify pricing discrepancies in these ‘under-researched’ stocks and blend together a portfolio of investments that offers the highest risk adjusted after-tax expected return. The Fund will typically hold between 15 and 40 investments. There is a cap on the Fund size to maximise performance potential.

In-depth Research


Phoenix’s value orientated analysis focuses on ‘bottom up’ research to understand the key factors that have driven historic performance and to enable informed forecasts to be made of future earnings. Phoenix adopts a long-term time horizon when entering into positions. We seek to buy well, and wait for the market to discover each investment’s true value.

Primary valuation techniques include an Internal Rate of Return model that values a stock based on estimated future cash flows and a Sum of the Parts model that determines a valuation based on applying multiples to the various business lines should they be sold separately.

Asset Allocation


The Fund will invest primarily in securities listed on the ASX (or expected to be listed within 6 months), but may also invest in a selected range of other assets. The Fund will generally invest in keeping with the following targeted asset allocations as a percentage of the Fund’s total portfolio, with no individual stock accounting for more than 20% of the portfolio.

Investment Class (% of portfolio) Target Range
ASX listed securities1 75-100%
Unlisted securities2 0-10%
Cash3 0-25%
Maximum position in any single entity 20%
  1. Includes securities expected to be listed within 6 months
  2. The Fund may continue to hold previously listed securities that have de-listed
  3. Higher levels of cash may be held for short periods of time pending Invetsment of significant application amounts

Key Features

Investment Objective The objective of the Fund, over rolling 5 year periods is to:
  • Deliver a total return in excess of inflation1 plus 7.5%; and
  • Exceed the returns of the S&P/ASX Small Ordinaries Accumulation Index after fees and costs
Suggested Timeframe At least 5 years
Responsible Entity Cromwell Funds Management Limited (“CFM”)
Investment Manager Phoenix Portfolios Pty Ltd (“Phoenix”)
Minimum Initial Investment $20,0002
Maximum Initial Investment $250,0002
Minimum Balance $20,0002
Distribution Payments Determined quarterly as at 30 September, 31 December, 31 March and 30 June
Reinvestment Option Ability to reinvest distributions to compound growth
Unit Price Unit prices will be calculated monthly
Monthly Withdrawals

The withdrawal cut-off time is 4.00pm EDST on the Sydney business day prior to the 26th calendar day of any month.

Withdrawals received prior to the withdrawal cut-off time will be accepted as at the first day of the following month.

Base Management Fees Nil
Performance Fee CFM will charge a performance fee of 20% of the Fund’s cumulative gross return in excess of the high water mark. The performance fee is calculated and payable monthly in arrears. Any previous underperformance is recovered before CFM is entitled to a performance fee.
Administration Costs CFM has agreed to cap the Fund’s administration costs at 0.15%pa of Net Trust Value until 30 June 2016
Entry Fee Nil
Buy/Sell Spread +/- 0.50% on applications and redemptions (paid to the Fund, not the manager)
  1. Inflation as measured by the Consumer Price Index
  2. CFM reserves the right to vary amounts

Portfolio Construction


Portfolio construction seeks to blend together a portfolio of securities that offers the highest risk adjusted after-tax expected return. We aim to concentrate the Fund’s holdings in our very best ideas with the Fund typically holding between 15 and 40 securities. Key features of the portfolio construction include:

  • Security positions will not be constrained by benchmark considerations
  • Risk is managed with the aim of minimising the chances of a permanent loss of capital
  • The tax position of the Fund is managed from the perspective of a domestic tax paying investor and incorporates the value of franking credits into security valuations
  • In-Depth Fundamental Research using two primary valuation techniques: Internal Rate of Return modelling and Sum of the Parts model.

Prior to this level of scrutiny, each security undergoes the following quantitative screening:



The Fund’s investment universe comprises most listed entities outside of the ASX top 300 by market capitalisation.

Quantitative screens are used to eliminate a substantial portion of securities, many of which are likely to be start-up type companies with little or no track record. Approximately 150 securities pass through the quantitative screens out of an initial universe of 1,300.

Attractive securities may screen with several of the following attributes:

  • Low Price / Earnings
  • Low Enterprise Value / Earnings Before Interest and Tax
  • Low Price / Book
  • Low Price / Cash Flow
  • High Return on Tangible Assets
  • High levels of Inside Ownership

Given that security pricing is most prone to error in situations where there is minimal professional analyst coverage, we expect the majority of securities that pass through the quantitative screening process will have a market capitalisation below $100 million.

Phoenix will also review opportunities within the small capitalisation universe that have been created as a result of the announcement of impending transactions. Due to the small size of the companies involved, these transactions often may not attract the interest of specialist event driven fund managers and therefore may be inefficiently priced.

Examples of event driven trades could include:

  • Risk Arbitrage – The purchase of securities in a target company that is the subject of a takeover or merger offer.
  • Full/Partial Liquidations – The purchase of a security post the announcement of a full or partial liquidation. Liquidations can typically be valued with a higher degree of certainty than other investment opportunities.
  • Spin Offs – A spin off is a reorganisation of a company whereby a portion of its operations are re-listed as a separate business. Spin offs often lead to attractive opportunities as there is typically minimal analyst coverage of the newly formed entity.
  • Index removal – When a security is removed from a widely followed index there is typically forced selling from investors with investment mandate restrictions. This can often result in securities being sold down to prices that offer attractive prospective returns.


Risk Disclosure


Any investment, including an investment in this Fund, is subject to risk. If a particular risk eventuates it may result in reduced distributions and/or a loss of some or all of the capital value of your investment. Examples of key risks include: manager risk, market risk and liquidity risk. See Section 4 of the Fund’s product disclosure statement dated 17 April 2015 (“PDS”).

Past performance is not indicative of future performance. Forward-looking statements in this webpage are provided as a general guide only. Capital growth, distributions and tax consequences cannot be guaranteed. Forward-looking statements and the performance of the Fund are subject to the risks and assumptions set out in the Fund’s PDS.

Distribution and NAV History


Distribution, reinvestment and Net Asset Value per unit




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Exit Price

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FY17 Quarterly Distribution





2017 Total Annual Distribution




FY16 Quarterly Distribution





FY16 Quarterly Distribution





FY16 Quarterly Distribution





FY16 Quarterly Distribution





2016 Total Annual Distribution




FY15 Quarterly Distribution





FY15 Quarterly Distribution





FY15 Quarterly Distribution





2015 Total Annual Distribution




Experienced Investment Manager


Phoenix is a value manager, meaning it looks to exploit market conditions by identifying securities whose fundamental attributes are inconsistent with their current prices - buying securities that represent good value and selling once they become overpriced. Phoenix utilises detailed, yet standardised, financial models allowing a large universe of securities to be reviewed in order to determine the most attractive investment opportunities and create a diversified portfolio.



Units are issued by the Fund at a unit price determined in accordance with the Responsible Entity’s Unit Pricing Policy. Per the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority’s (APRA's) Unit Pricing: Guide to Good Practice, investors will receive compensation for any material unit pricing errors.  In accordance with these guidelines the Fund does not pay exited members compensation for material unit pricing errors where the amount of any compensation payable is less than $20.

Cromwell Funds Management Limited ABN 63 114 782 777 AFSL 333 214 (CFM) has prepared this webpage and is the responsible entity of, and the issuer of units in, the Cromwell Phoenix Opportunities Fund ARSN 602 776 536 (the Fund). In making an investment decision in relation to the Fund, it is important that you read the Fund’s product disclosure statement dated 17 April 2015 (“PDS”). The PDS is issued by CFM and is available from or by calling Cromwell Investor Services on 1300 276 693.

Applications for units in the Fund can only be made on application forms accompanying the PDS.

This webpage has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision, you should consider the IM and assess, with or without your financial or tax adviser, whether the Fund fits your objectives, financial situation or needs.

The performance of the Fund is subject to the risks and assumptions set out in the PDS. CFM and its related bodies corporate and their associates do not receive any remuneration or benefits for the general advice given in this webpage. If you acquire units in the Fund, CFM and certain related parties may receive fees from the Fund and these fees are disclosed in the PDS.

Phoenix Portfolios Pty Ltd ABN 80 117 850 254 AFSL 300 302 (Phoenix) is the investment manager of the Fund. None of CFM, Phoenix nor their related entities, directors or officers makes any promise or representation, or gives any guarantee as to the success of the Fund, distributions, amount you will receive on withdrawal, income or capital return or the taxation consequences of investing.