03 April 2014
Cromwell Funds Management Limited ABN 63 114 782 777, as responsible entity of the Cromwell Australian Property Fund ARSN 153 092 516 ("the Fund"), has determined to waive its entitlement to its ongoing management fee from April 2014 until further notice. Further, the expected normal administrative and operating expenses have reduced to 0.2% per annum of net assets.
As a result, the Fund’s Indirect Cost Ratio is reduced to approximately 1.35%. All other fees described in the PDS, including the trust management fees charged in DPF and PSF, remain unchanged.
This means the following replace the equivalent sections of the Fund’s Product Disclosure Statement (dated 24 September 2013) ("PDS"):
Key Features (Page 5)
Fees & Other Costs
CFM will not charge an annual ongoing management fee for managing the Fund.
Normal administrative and operating expenses (excluding management fees) are estimated to be up to 0.20% per annum of net assets.
The Fund may also incur abnormal costs from time to time.
Indirect Cost Ratio
The total of ongoing management fees plus other costs is forecast to be approximately 1.35% per annum of net assets based on the Fund’s Initial Investment Portfolio. This may change over time.
CFM will charge a performance fee of 20% of any outperformance above the Benchmark, calculated and payable quarterly in arrears.
The performance fee will only be charged for a period if any previous underperformance has been recovered.
Buy spread 0.10%
Sell spread 0.10%
The buy and sell spreads represent CFM’s estimate of the relevant transaction costs associated with applications and withdrawals. They may change from time to time
Section 5 - Fees & Other Costs (Page 22)
Ongoing Fund Costs
The Fund will normally incur ongoing costs such as audit fees, custody fees, compliance committee costs, accounting/tax/legal advice, bank charges, marketing costs, printing and stationery costs, postage and registry fees. CFM estimates these to average 0.20% per annum of the Fund’s net asset value and has agreed to bear any normal ongoing costs above this level for the period to 30 June 2014.
Section 5.5 - Example of Annual Fees and Costs (Page 25)
The table below gives an example of how the fees and costs for this product can affect your investment over a 1 year period. You should use this table to compare this product with other managed investment products.
For every additional $5,0002 you put in, you will be charged $0
PLUS Ongoing Management Costs of ICR3
1.35% per annum
And, for every $50,000 you have in the Fund you will be charged $940 each year.
Cost of Fund
If you had an investment of $50,000 at the beginning of the year and you put an additional $5,000 in during that year then for that year, you would be charged fees of:
$675 – $743
What it costs you will depend on the fees you negotiate with your financial adviser.
Section 5 - Fees & Other Costs (Page 21)
Type of Fee or Cost
How & When Paid
The fees and costs for managing your investment
i. Nil ongoing fund management fee for managing the Fund (i.e. $0 per annum out of every $10,000 of net assets).
ii. Ongoing fund costs estimated to be up to 0.20% per annum of the Fund’s net assets (i.e. $20 per annum out of every $10,000 of net assets).
iii. Performance fee of 20% of the outperformance above the Benchmark for each quarter. Any previous underperformance must be recovered before the fee is payable.
iv. Abnormal expenses which cannot be estimated with any certainty.
Payable when incurred. If expenses are initially paid by CFM, CFM is entitled to be reimbursed upon presentation of relevant invoices. Payable from Fund assets.
Payable to CFM quarterly in arrears. Payable from Fund assets.
Payable when incurred. Payable from Fund assets.
5.2 Additional Explanation of Fees & Costs
5.2.1 Management fees and Costs
These fees and costs are ongoing and paid by the Fund and therefore indirectly by you in proportion to your investment in the Fund. If CFM or a related party is liable to pay GST on any fees charged to the Fund, CFM is entitled to be reimbursed by the Fund for the GST liability.
Fund Management Fees
CFM will not charge an ongoing management fee for managing the Fund until CFM determines otherwise. It will earn trust management fees from DPF, the Cromwell managed funds into which it invests, and PSF (see Section 5.2.2).
1. All fees set out in this section are inclusive of the net effect of Goods and Services Tax (GST), (i.e. includes GST net of input tax credits and any available reduced input tax credits). The Fund may not be entitled to claim a reduced input tax credit in all instances.
2. The minimum initial investment amount for the Fund is $10,000. The minimum additional investment amount is $1,000.
3. Indirect cost ratio (ICR) is a measure of the indirect management costs of investing in the Fund, being those borne by all investors on a proportionate basis.