The Cromwell Phoenix Property Securities Fund (“the Fund”) is an unlisted fund that gives investors exposure to a diversified portfolio of predominantly ASX listed property securities (A-REITs¹) selected by its investment manager Phoenix Portfolio Pty Ltd ("Phoenix"). It aims to provide a total return (after management fees) in excess of the S&P/ASX 300 A-REIT Accumulation Index while delivering lower total risk (as measured by volatility of returns) over the medium to long term.
Investment strategy
The Fund provides investors with a diversified exposure to a broad range of Australian listed property securities including, but not limited to, the retail, residential, commercial, industrial and hotel sectors. It is expected that at least 20 securities will be held at any given time.
The majority of the Fund will be invested in securities that are components of the S&P/ASX 300 A-REIT Index. However, given the high concentration of a small number of securities in the index, the Fund will not be constrained by index considerations. Further, for risk control reasons, no more than 20% of the Fund’s assets will be invested in any one security.
Investment PHILOSOPY
Phoenix’s investment philosophy is that over the medium to long term, superior investment performance may be achieved by investing in attractively priced securities as determined by fundamental, bottom up analysis. This analysis culminates in a forecast of future cash flows discounted back into today’s dollars, ensuring a consistent valuation methodology between individual securities.
The Fund has been designed to fully capture the insights derived from this security specific research by holding a well diversified portfolio of the most attractively priced securities.
Fund Performance
The Fund commenced investing on 16 April 2008.
Performance Statistics2 (to 31 December 2011)
Features
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Access to Investment Manager - Phoenix Portfolios Pty Ltd
Cromwell has appointed boutique equity investment manager Phoenix Portfolios Pty Ltd (“Phoenix”) to manage the Fund’s investments. Under the exclusive arrangement, retail investors can now access Phoenix’s established property securities research and investment skills, previously only accessible to institutional investors.
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Strategic Capacity Constraint
To allow greater opportunity for benchmark outperformance, Phoenix has set a strategically determined capacity constraint across all its funds of 1.5% of the A-REIT Index. This is intended to allow rapid portfolio readjustment in response to changing circumstances and enable investment in smaller stocks often overlooked by larger managers. Phoenix believes small stocks often offer a higher capability to deliver above average growth in earnings.
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Diversified Portfolio
The Fund provides access to a broad range of ASX-listed property securities giving exposure to, among others, the retail, industrial and commercial sectors. It is expected that at least 20 securities will be held at aany time.
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Benchmark Unaware Portfolio
Whilst benchmarking its performance against the S&P/ASX 300 A-REIT Accumulation Index, the Fund is not constrained by the index composition. Whilst the index currently is more than 40% comprised by one security, Westfield Group, the Fund may only invest 20% in any one security, reducing stock specific risk and increasing the opportunity for active returns.
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Low fees
There are no entry or exit fees. Cromwell currently charges an ongoing management fee of just 0.82% per annum of net assets, with total ongoing costs and fees of just 0.97% per annum.
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Quarterly Distributions
Distributions are paid quarterly or can be reinvested to compound growth.
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Liquidity
Daily withdrawals usually paid within five business days.
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Potential for capital growth3
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Minimum investment $20,000
Experienced Investment Manager
Cromwell has appointed boutique equity investment manager Phoenix Portfolios Pty Ltd to manage the investment assets of the Fund under an exclusive arrangement. This gives retail investors access to Phoenix’s established property securities research and investment skills which were previously only accessible by institutional investors.
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.
EXPERIENCED FUND MANAGER
The Responsible Entity for the Fund is Cromwell Property Securities Limited (“CPS”). CPS is part of Cromwell Property Group, a diversified property investment owner and manager listed on the ASX.
Cromwell Property Group is an experienced fund manager specialising in property investment, with over $1.8 billion of assets under management. CPS has a track record of developing high quality, high yielding investment products and delivering growth to investors.
Being a listed property security, Cromwell Property Group could be considered a stock that is eligible for selection by the Fund. However to avoid any potential for a conflict of interest, the Fund will not invest in Cromwell Property Group securities.
HOW TO APPLY
Direct Investors
For direct investors the minimum application is $20,000, then in multiples of $1,000.
- Applications must be made on an application form from the Product Disclosure Statement (PDS) dated 4 February 2011.
- Cheques or drafts must be made payable to CPSL ATF Cromwell Phoenix Property Securities Fund. Only cheques or drafts in Australian currency and drawn on an Australian bank will be accepted.
- Additional investments of at least $1,000 can be made at any time by completing an additional investment form contained in the PDS, attaching a cheque and returning to CPS.
Indirect Investors
- Investors can make investments indirectly through an IDPS by directing the IDPS operator to acquire units in the Fund on their behalf.
- Indirect investors do not become unitholders in the Fund and accordingly they do not acquire the same rights as direct investors (those rights are acquired by the IDPS operator). The IDPS operator can exercise or decline to exercise the rights they have as unitholders on the investor’s behalf according to the arrangements governing the IDPS.
Notes
Last Updated 30.06.11
1. Under changes announced by Standard & Poor’s (S&P) and the Australian Securities Exchange (ASX) on 5 December 2007, the two main S&P/ASX Property Trust indices were renamed on March 5, 2008, to reflect broader changes being made by the ASX and Property Council of Australia (PCA) to re-brand Australian Listed Property Trusts (LPTs) as Australian Real Estate Investment Trusts (A-REITs), in line with global practice.
2. Figures supplied by Phoenix Portfolios Pty Ltd. Past performance not indicative of future performance. Positions held by the Fund are subject to continual change.
3. Capital growth is not guaranteed.
Units in the Cromwell Phoenix Property Securities Fund ARSN 129 580 267 (the Fund) are issued by Cromwell Property Securities Limited ABN 11 079 147 809, AFSL 238052. Applications can only be made on the application form in the Product Disclosure Statement (PDS) dated 4 February 2011.