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) and aims to outperform the S&P/ASX 300 A-REIT Accumulation Index over the medium to long term.
Fund Performance
As the Fund was only launched on 14 April 2008, there is currently no performance information available. Seed funding of $5 million from Cromwell Group will allow the Fund to immediately take advantage of strong buying opportunities in the A-REIT sector and also allow historical returns to be published after the Fund’s first distribution payment is made (expected in July 2008).
The historical performance of the benchmark for the Fund, the S&P/ASX 300 A-REIT Accumulation Index, has been strong; outperforming most other asset classes over a 10 year timeframe to 31 January 2008 as illustrated below.
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Source: Phoenix Portfolios Pty Ltd
Historical performance figures are not necessarily an indication of future performance.
1. Annual compound returns 2. Property Indices use S&P/ASX constituents post 1 April 2000 and old All Ordinaries Constituents before this date. Post July index return reflects S&P ASX (GICS) Property constituents.
A Rare Opportunity
The objective of the Fund is to take advantage of recent market volatility and strong buying opportunities among Australian Real Estate Investment Trusts (A-REITs¹), previously referred to as Australian Listed Property Trusts or LPTs, after the sector fell more than 24% in the 12 months to March 31, 2008².
The Fund will target opportunities in the sector created by the fall, by capitalising on undervalued stocks.
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 have a strategically determined capacity constraint of 1.5% of the A-REIT Index intended to allow rapid portfolio readjustment in response to changing circumstances and enabling investment in smaller stocks often overlooked by larger managers yet often offering 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 the retail, industrial and commercial sectors. It is expected that at least 20 securities will be held at a time.
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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, 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 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, giving retail investors access to Phoenix’s established property securities research and investment skills previously only accessible by institutional investors.
Michael Wood and Stuart Cartledge are the founding shareholders of Phoenix. Mr Wood was previously Managing Director and Head of Asia Pacific Equities and Balanced for Citigroup Asset Management. Mr Cartledge also worked for Citigroup in the role of Director and Head of Listed Property Securities.
Phoenix are value managers, meaning they look to exploit market conditions, identifying securities whose fundamental attributes are inconsistent with their current prices - buying securities when they represent good value and selling once they become overpriced. Phoenix utilise 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”), part of the ASX-listed Cromwell Group.
Cromwell Group (ASX: CMW), consisting of a billion dollar property trust and a successful funds management business, has a track record of developing high quality, high yielding investment products and delivering growth to investors.
Being a listed property security, Cromwell 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 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 14 April 2008.
- Cheques or drafts must be made payable to ANZ ACF 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 of direct investors which 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 14.04.08
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. S&P/ASX300 Property Accumulation Index
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 14 April 2008.