update to pre select funds product disclosure statement...pre select balanced fund $2.50 $12.50 pre...
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Update to Pre Select Funds Product Disclosure Statement
Dated: 29 May 2020
Important information This document is prepared by Navigator Australia Limited (ABN 45 006 302 987, AFSL 236466), as responsible entity of the Funds. The responsible entity is a member of the National Australia Bank Limited (ABN 12 004 044 937) (NAB) group of companies. NAB does not guarantee or otherwise accept any liability in respect of the financial products referred to in this document.
This updates the Product Disclosure Statement dated 22 March 2019 (PDS) including the Online Update to the PDS dated 22 May 2020 for:
· Pre Select Conservative Fund ARSN 104 411 583
· Pre Select Balanced Fund ARSN 104 412 446
· Pre Select Growth Fund ARSN 104 410 782
· Pre Select High Growth Fund ARSN 104 411 467 (Funds) issued by Navigator Australia Limited (Responsible Entity).
What is changing?
Update to buy/sell spreads
Buy/sell spreads are incurred when investors apply for or redeem units in the Funds. They reflect the transaction
costs associated with the purchasing and selling of assets within the Funds in order to issue units or pay redemption
proceeds to investors. The application of buy/sell spreads to the Funds ensures fair attribution of costs between
transacting and non-transacting investors. NAL does not profit from these spreads.
Due to increased volatility in global investment markets following the uncertainty driven by COVID-19, there has
been a marked increase in transaction costs across asset classes. The buy/sell spreads for the Funds are likely to
vary from time to time and may increase or decrease significantly.
NAL has reviewed the buy/sell spreads applied for the Funds and the outcome of our review is reflected below.
Effective from 29 May 2020, the buy/sell spreads and dollar examples table on page 23 of the PDS is replaced with
the following:
You incur buy/sell spreads when you buy or sell units in the Fund:
Fund Buy Spread Sell Spread
Pre Select Conservative Fund +0.15% -0.15%
Pre Select Balanced Fund +0.10% -0.15%
Pre Select Growth Fund +0.10% -0.20%
Pre Select High Growth Fund +0.15% -0.15%
This means that for every $5,000 you contribute to or withdraw from a Fund, you will incur costs of:
Fund Contribution amount Withdrawal amount
Pre Select Conservative Fund $7.50 $7.50
Pre Select Balanced Fund $5.00 $7.50
Pre Select Growth Fund $5.00 $10.00
Pre Select High Growth Fund $7.50 $7.50
Further information
For a paper or electronic copy of this update (free of charge), call us from anywhere in Australia on 132 652.
Update to Pre Select Funds Product Disclosure Statement
Dated: 22 May 2020
Important information This document is prepared by Navigator Australia Limited (ABN 45 006 302 987, AFSL 236466), as responsible entity of the Funds. The responsible entity is a member of the National Australia Bank Limited (ABN 12 004 044 937) (NAB) group of companies. NAB does not guarantee or otherwise accept any liability in respect of the financial products referred to in this document.
This updates the Product Disclosure Statement dated 22 March 2019 (PDS) including the Online Update to the PDS dated 24 April 2020 for:
· Pre Select Conservative Fund ARSN 104 411 583
· Pre Select Balanced Fund ARSN 104 412 446
· Pre Select Growth Fund ARSN 104 410 782
· Pre Select High Growth Fund ARSN 104 411 467 (Funds) issued by Navigator Australia Limited (Responsible Entity).
What is changing?
Update to buy/sell spreads
Buy/sell spreads are incurred when investors apply for or redeem units in the Funds. They reflect the transaction
costs associated with the purchasing and selling of assets within the Funds in order to issue units or pay redemption
proceeds to investors. The application of buy/sell spreads to the Funds ensures fair attribution of costs between
transacting and non-transacting investors. NAL does not profit from these spreads.
Due to increased volatility in global investment markets following the uncertainty driven by COVID-19, there has
been a marked increase in transaction costs across asset classes. The buy/sell spreads for the Funds are likely to
vary from time to time and may increase or decrease significantly.
NAL has reviewed the buy/sell spreads applied for the Funds and the outcome of our review is reflected below.
Effective from 22 May 2020, the buy/sell spreads and dollar examples table on page 23 of the PDS is replaced with
the following:
You incur buy/sell spreads when you buy or sell units in the Fund:
Fund Buy Spread Sell Spread
Pre Select Conservative Fund +0.15% -0.20%
Pre Select Balanced Fund +0.10% -0.15%
Pre Select Growth Fund +0.10% -0.20%
Pre Select High Growth Fund +0.15% -0.15%
This means that for every $5,000 you contribute to or withdraw from a Fund, you will incur costs of:
Fund Contribution amount Withdrawal amount
Pre Select Conservative Fund $7.50 $10.00
Pre Select Balanced Fund $5.00 $7.50
Pre Select Growth Fund $5.00 $10.00
Pre Select High Growth Fund $7.50 $7.50
Further information
For a paper or electronic copy of this update (free of charge), call us from anywhere in Australia on 132 652.
Update to Pre Select Funds Product Disclosure Statement
Dated: 24 April 2020
Important information This document is prepared by Navigator Australia Limited (ABN 45 006 302 987, AFSL 236466), as responsible entity of the Funds. The responsible entity is a member of the National Australia Bank Limited (ABN 12 004 044 937) (NAB) group of companies. NAB does not guarantee or otherwise accept any liability in respect of the financial products referred to in this document.
This updates the Product Disclosure Statement dated 22 March 2019 (PDS) including the Online Update to the PDS dated 9 April 2020 for:
· Pre Select Conservative Fund ARSN 104 411 583
· Pre Select Balanced Fund ARSN 104 412 446
· Pre Select Growth Fund ARSN 104 410 782
· Pre Select High Growth Fund ARSN 104 411 467 (Funds) issued by Navigator Australia Limited (Responsible Entity).
What is changing?
Update to buy/sell spreads
Buy/sell spreads are incurred when investors apply for or redeem units in the Funds. They reflect the transaction
costs associated with the purchasing and selling of assets within the Funds in order to issue units or pay redemption
proceeds to investors. The application of buy/sell spreads to the Funds ensures fair attribution of costs between
transacting and non-transacting investors. NAL does not profit from these spreads.
Due to increased volatility in global investment markets following the uncertainty driven by COVID-19, there has
been a marked increase in transaction costs across asset classes. The buy/sell spreads for the Funds are likely to
vary from time to time and may increase or decrease significantly.
NAL has reviewed the buy/sell spreads applied for the Funds and the outcome of our review is reflected below.
Effective from 24 April 2020, the buy/sell spreads and dollar examples table on page 23 of the PDS is replaced with
the following:
You incur buy/sell spreads when you buy or sell units in the Fund:
Fund Buy Spread Sell Spread
Pre Select Conservative Fund 0.10% 0.30%
Pre Select Balanced Fund 0.05% 0.25%
Pre Select Growth Fund 0.10% 0.20%
Pre Select High Growth Fund 0.15% 0.20%
This means that for every $5,000 you contribute to or withdraw from a Fund, you will incur costs of:
Fund Contribution amount Withdrawal amount
Pre Select Conservative Fund $5.00 $15.00
Pre Select Balanced Fund $2.50 $12.50
Pre Select Growth Fund $5.00 $10.00
Pre Select High Growth Fund $7.50 $10.00
Further information
For a paper or electronic copy of this update (free of charge), call us from anywhere in Australia on 132 652.
Update to Pre Select Funds Product Disclosure Statement
Dated: 9 April 2020
Important information This document is prepared by Navigator Australia Limited (ABN 45 006 302 987, AFSL 236466), as responsible entity of the Funds (Responsible Entity). The Responsible Entity is a member of the National Australia Bank Limited (ABN 12 004 044 937) (NAB) group of companies. NAB does not guarantee or otherwise accept any liability in respect of the financial products referred to in this document
This updates the Product Disclosure Statement dated 22 March 2019 (PDS) including the Online Update to the PDS dated 1 October 2019 for:
· Pre Select Conservative Fund ARSN 104 411 583
· Pre Select Balanced Fund ARSN 104 412 446
· Pre Select Growth Fund ARSN 104 410 782
· Pre Select High Growth Fund ARSN 104 411 467 (Funds) issued by Navigator Australia Limited (Responsible Entity).
What is changing?
Update to buy/sell spreads
Buy/sell spreads are incurred when investors apply for or redeem units in the Funds. They reflect the transaction
costs associated with the purchasing and selling of assets within the Funds in order to issue units or pay redemption
proceeds to investors. The application of buy/sell spreads to the Funds ensures fair attribution of costs between
transacting and non-transacting investors. NAL does not profit from these spreads.
Due to increased volatility in global investment markets following the uncertainty driven by COVID-19, there has
been a marked increase in transaction costs across asset classes.
NAL has reviewed the buy/sell spreads applied for the Funds and the outcome of our review is reflected below.
Effective from 9 April 2020, the buy/sell spreads and dollar examples table on page 23 of the PDS is replaced with
the following:
You incur buy/sell spreads when you buy or sell units in the Fund:
Fund Buy Spread Sell Spread
Pre Select Conservative Fund 0.10% 0.45%
Pre Select Balanced Fund 0.10% 0.35%
Pre Select Growth Fund 0.10% 0.30%
Pre Select High Growth Fund 0.15% 0.25%
This means that for every $5,000 you contribute to or withdraw from a Fund, you will incur costs of:
Fund Contribution amount Withdrawal amount
Pre Select Conservative Fund $5.00 $22.50
Pre Select Balanced Fund $5.00 $17.50
Pre Select Growth Fund $5.00 $15.00
Pre Select High Growth Fund $7.50 $12.50
Further information
For a paper or electronic copy of this update (free of charge), call us from anywhere in Australia on 132 652.
Update to Pre Select Funds Product Disclosure Statement Dated 1 October 2019
Update to Pre Select Funds Product Disclosure Statement | 1
This updates the Product Disclosure Statement (PDS) for:
• Pre Select Conservative Fund ARSN 104 411 583
• Pre Select Balanced Fund ARSN 104 412 446
• Pre Select Growth Fund ARSN 104 410 782
• Pre Select High Growth Fund ARSN 104 411 467
(Funds) issued by Navigator Australia Limited (Responsible Entity).
What is changing?
Update to investment adviser name
Effective from 1 October 2019, the investment adviser (as referenced on pages 4 and 7 of the PDS) changed their legal name as follows:
Existing Name New Name
NAB Asset Management Services Limited ABN 38 055 638 474 AFSL 230687
MLC Asset Management Services Limited ABN 38 055 638 474 AFSL 230687
There is no change to how the Funds are being managed or the investment adviser other than the change in name.
Update to fees and costs
In accordance with the fees and costs disclosure requirements in ASIC Regulatory Guide 97 Disclosing fees and costs in PDSs and
periodic statements (RG 97) including ASIC Class Order [CO 14/1252] (as amended) by ASIC Corporations (Amendment) Instrument
2016/1224 (CO 14/1252) certain fees and cost figures in the PDS for the Funds are updated as follows.
Page 20 – Fees and other costs
The table below replaces the equivalent section on page 20 of the PDS.
Type of fee or cost Amount How and when paid
Fees when your money moves in or out of the managed investment products.
Establishment fee
The fee to open your investment.
Nil There is no Establishment fee.
Contribution fee
The fee on each amount contributed to your investment.
Nil There is no Contribution fee.
Withdrawal fee
The fee on each amount you take out of your investment.
Nil There is no Withdrawal fee.
Exit fee
The fee to close your investment.
Nil There is no Exit fee.
Update to Pre Select Funds Product Disclosure Statement | 2
Update to Pre Select Funds Product Disclosure StatementDated 1 October 2019
Management costs1,2
The fees and costs for managing your investment.
Management fee: • Pre Select Conservative Fund: 0.60% pa of the Fund’s net asset value
• Pre Select Balanced Fund: 0.65% pa of the Fund’s net asset value
• Pre Select Growth Fund: 0.70% pa of the Fund’s net asset value
• Pre Select High Growth Fund: 0.85% pa of the Fund’s net asset value
The Management fee is calculated daily on the relevant Fund’s net asset value and reflected in the daily unit price. It is paid from the assets of the relevant Fund and is not required to be paid by you separately.
Wholesale clients (as defined in the Corporations Act 2001 (Cth)) may be able to negotiate this fee by contacting us.
Estimated indirect costs3 • Pre Select Conservative Fund: 0.02% pa of the Fund’s net asset value
• Pre Select Balanced Fund: 0.02% pa of the Fund’s net asset value
• Pre Select Growth Fund: 0.02% pa of the Fund’s net asset value
• Pre Select High Growth Fund: 0.02% pa of the Fund’s net asset value
This is made up of:
• Estimated performance related costs, and
• Estimated other indirect costs
Indirect costs are costs and expenses incurred by the Fund that are not charged as a Management fee but are expected to reduce the net return of the relevant Fund and are reflected in the daily unit price.
Service fees
Switching fee
The fee for changing Funds.
Not applicable. Not applicable.
1. See ‘Additional explanation of fees and costs’ in this section for further details.
2. Rounded to two decimal places.
3. The estimated indirect costs are based on costs incurred for the 12 months to 30 June 2019, please see ‘Additional explanation of fees and costs’ for further details.
Page 21 – Example of annual fees and costs
The tables below replace the equivalent section on page 21 of the PDS.
Example of annual fees and costs for the Pre Select Balanced Fund
This table gives an example of how the fees and costs for this managed investment product can affect your investment over a 1 year
period. You should use this table to compare this product with other managed investment products.
EXAMPLE:
Pre Select Balanced Fund
Balance of $50,000 with a contribution of $5,000 during the year¹
Contribution Fees 0% For every additional $5,000 you put in, you will be charged $0.
PLUS
Management Costs Management fee Indirect costs Total
0.65%
0.02%
0.67%
And, for every $50,000 you have in the Fund you will be charged:
$325
+ $10
= $335 each year.
EQUALS
Cost of the Fund
If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees from:
$335
What it costs you will depend on the Fund you choose.
What it costs you will depend on the fees you negotiate with the Fund, your IDPS operator or your financial adviser.
1. This example assumes the $5,000 additional investment occurs at the end of the year.
Update to Pre Select Funds Product Disclosure Statement | 3
Update to Pre Select Funds Product Disclosure StatementDated 1 October 2019
Example of annual fees and costs for the Pre Select Growth Fund
This table gives an example of how the fees and costs for this managed investment product can affect your investment over a 1 year
period. You should use this table to compare this product with other managed investment products.
EXAMPLE: Pre Select Growth Fund
Balance of $50,000 with a contribution of $5,000 during the year¹
Contribution Fees 0% For every additional $5,000 you put in, you will be charged $0.
PLUS
Management Costs Management fee Indirect costs Total
0.70%
0.02%
0.72%
And, for every $50,000 you have in the Fund you will be charged:
$350
+ $10
= $360 each year.
EQUALS
Cost of the Fund
If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees from:
$360
What it costs you will depend on the Fund you choose.
What it costs you will depend on the fees you negotiate with the Fund, your IDPS operator or your financial adviser.
1. This example assumes the $5,000 additional investment occurs at the end of the year.
Page 22 – Additional explanation of fees and costs
The information below replaces the equivalent section on page 22 of the PDS.
Indirect costs
The Funds may also incur costs and expenses that won’t be charged as a Management fee but are expected to reduce the net return
of the Funds. These indirect costs are reflected in the daily unit price and any reporting on the performance of the Funds. Indirect cost
amounts included in this document are based on actual costs incurred for the 12 months to 30 June 2019. Amounts may vary from time to time
and you will not be given advance notice of any changes to these amounts. You should refer to mlc.com.au for updated amounts.
Indirect costs are made up of:
• Performance related costs
Performance related costs are amounts that investment managers may charge when their performance exceeds a specified level.
This is independent of the overall performance of the Funds and therefore the amounts may be payable to the investment
managers even if the Fund itself produces negative performance. Different performance related costs may be charged by different
investment managers and will vary depending upon the investment managers’ performance.
• Other indirect costs
Underlying investment funds will generally charge a management fee and expense recoveries.
The information below replaces the equivalent section on page 22 of the PDS.
Transactional costs
When assets in a Fund or in underlying investments are bought or sold, costs such as brokerage, stamp duty and settlement costs are
incurred. Transactional costs may also be incurred when the market process for purchasing assets causes the price paid to be higher
than the value of the assets immediately after the purchase transaction, for example where bid/ask spreads are incurred. The
estimated transactional costs for the financial year to 30 June 2019 are as follows:
Fund (A)1
Estimated transactional costs as at 30 June 2019
(B)
Estimated transactional costs recovered from buy/sell spread
(C = A – B)
Estimated transactional costs reducing return of the Fund
Pre Select Conservative Fund 0.18% 0.02% 0.16%
Pre Select Balanced Fund 0.18% 0.04% 0.14%
Pre Select Growth Fund 0.17% 0.03% 0.14%
Pre Select High Growth Fund 0.18% 0.02% 0.16%
1. Estimate costs are based on each Fund’s net asset value.
These costs are not included in the management costs and are expected to reduce the net return of the relevant Fund and are
reflected in the daily unit price. No part of the transaction costs are paid to us or any investment managers.
Update to Pre Select Funds Product Disclosure Statement | 4
Update to Pre Select Funds Product Disclosure StatementDated 1 October 2019
Important information
This document is prepared by Navigator Australia Limited ABN 45 006 302 987, AFSL 236466), as responsible entity of the Funds (Responsible Entity). The Responsible Entity is a member of the National Australia Bank Limited (ABN 12 004 044 937) (NAB) group of companies. NAB does not guarantee or otherwise accept any liability in respect of the financial products referred to in this document.
The information below is to be inserted into page 22 of the PDS after ‘Transactional costs’.
Borrowing costs
Borrowing costs (or gearing costs) may be incurred in a number of circumstances, including (but not limited to) where money is
borrowed to purchase an asset and where securities are borrowed as part of a fund’s investment strategy. Borrowing costs are
generally paid to third parties such as banks, providers of a margin lending facility and prime brokers and may include upfront costs
to establish the arrangement and ongoing costs like interest payments. These costs are not included in the management costs but are
deducted from the assets of the Trust and reduce the unit price at the time they are incurred. Borrowing costs may rise and fall over
time, and will depend on the level of borrowing, the interest amount and other amounts paid to lenders. The estimated borrowing
costs for the previous financial year to 30 June 2019 are shown below:
Fund Borrowing costs pa of the relevant Fund’s net asset value
Pre Select Conservative Fund 0.01%
Pre Select Balanced Fund 0.01%
Pre Select Growth Fund 0.01%
Pre Select High Growth Fund 0.01%
Update to buy/sell spreads
Page 23 - Buy/sell spreads
The information below replaces the equivalent section on page 23 of the PDS.
You incur the buy/sell spread when you buy or sell units in the Fund. The buy/sell spreads from 1 October 2019 are:
Fund Buy amount Sell amount
Pre Select Conservative Fund 0.05% 0.05%
Pre Select Balanced Fund 0.05% 0.05%
Pre Select Growth Fund 0.05% 0.05%
Pre Select High Growth Fund 0.05% 0.05%
This means that for every $5,000 you contribute to or withdraw from a Fund, you will incur costs of:
Fund Contribution amount Withdrawal amount
Pre Select Conservative Fund $25 $25
Pre Select Balanced Fund $25 $25
Pre Select Growth Fund $25 $25
Pre Select High Growth Fund $25 $25
Further information
For a paper or electronic copy of this update (free of charge), call us from anywhere in Australia on 132 652.
M153979-0919
Preparation date 3 October 2016
Trustee NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 Issuer of MLC Insurance (Super)
Fund MLC Super Fund ABN 70 732 426 024
Insurer MLC Limited ABN 90 000 000 402 AFSL 230694 Issuer of MLC Insurance
Pre Select fundsProduct Disclosure Statement
Preparation date 22 March 2019
Issued by The Responsible Entity, Navigator Australia Limited ABN 45 006 302 987 AFSL 236466
Fund Pre Select Conservative Fund Pre Select Balanced FundPre Select Growth FundPre Select High Growth Fund
ARSN 104 411 583104 412 446104 410 782104 411 467
Pre Select funds Product Disclosure Statement | 3
Contents
About Navigator Australia Limited 4
Risks of investing 5
How we invest your money 10
Investing in the Funds 12
Fees and other costs 19
Additional information 24
Important information
This PDS provides information about the Pre Select funds listed on the front cover (Funds).
This PDS contains important information you should consider before making an investment decision in relation to the Funds. The information provided in this PDS is general information only and does not take into account your personal financial situation or needs. We recommend you obtain financial advice for your own personal circumstances before making any investment decision.
This PDS is intended only for use by persons investing through an investor directed portfolio service, IDPS-like scheme, master trust or wrap operator (collectively referred to as a ‘Portfolio Service’ in this PDS). In this PDS, references to ‘you’ or ‘investors’ are to persons investing through a Portfolio Service.
The Funds offered under this PDS and the content in this PDS may change from time to time. We’ll directly notify your Portfolio Service of changes that are materially adverse. Changes that aren’t materially adverse will be made available on mlc.com.au or you can obtain a paper copy of the changes on request free of charge. You should check you have the most up to date version before making an investment decision. All amounts in these documents are Australian dollars unless stated otherwise.
Navigator Australia Limited (Navigator), the issuer of this PDS and responsible entity of the Funds, is a fully owned subsidiary within the NAB Group. No company in the NAB Group guarantees the capital value, payment of income or performance of the Funds. An investment in the Funds does not represent a deposit with or liability of the NAB Group and is subject to investment risk, including possible delays in repayment and loss of income and principal invested.
References in this document to ‘we’, ‘our’ or ‘us’ should be read as references to Navigator in its capacity as Responsible Entity.
4 | Pre Select funds Product Disclosure Statement
About Navigator Australia Limited
Navigator is the Responsible Entity for
the Funds.
As the Responsible Entity, we’re
responsible for all aspects of operating
the Pre Select funds (Funds) including
administration of the assets and
investment policy.
Navigator is a member of the NAB Group.
We believe the best way to manage
the Funds is to employ the skills of
multiple specialist investment managers.
We’ve appointed the NAB Group’s retail
multi-asset management business,
NAB Asset Management Services Limited
(NSL) to advise on and manage the Funds’
investments. Our investment experts
have extensive knowledge and experience
at designing and managing funds using
a multi-manager investment approach.
Investing with us
Our Funds have different investment
objectives because we know everyone has
different ideas about how their money
should be managed.
Our Funds make sophisticated
investing straightforward.
Our investment experts use a market-
leading investment approach to
structure our Funds with the aim of
delivering more reliable returns in many
potential market environments.
And, as their assessment of world
markets changes, our Funds are evolved
to manage new risks and capture
new opportunities.
We use specialist investment managers
in our Funds. Our investment experts
research hundreds of investment
managers from around the world and
select the managers they believe are
the best for our Funds. Our investment
managers may be specialist in-house
managers, external managers or a
combination of both.
Importantly, we stay true to the
objectives of our Funds so you can keep
on track to meeting your goals.
Looking out for your interests
In this document we outline how we
manage your money, the benefits and
risks of investing in the Funds and the
fees and costs you’ll be paying.
This will help you decide whether the
investment you’re considering is right
for you.
If you need any further information,
please contact your financial adviser
or contact us.
About the Funds
The Funds operate like most other
managed investment schemes.
Your money is pooled together
with other investors’ money to buy
investments which are managed on
behalf of all investors. The Funds’
investments may be directly in
securities, or through trusts.
When you invest in a managed
investment scheme, such as the Funds,
you gain exposure to investments that
you may not ordinarily have access to,
if you invest on your own.
The Funds are governed by their
Constitutions which are registered
with the Australian Securities and
Investments Commission (ASIC). ASIC
takes no responsibility for this PDS or
the operation of the Funds by Navigator.
Who can invest
If you want to start an investment in the
Funds you can do so through a Portfolio
Service offered by a subsidiary of the
NAB Group.
If you already have an investment in
the Funds you can add or change your
investments, however some restrictions
may apply.
Pre Select funds Product Disclosure Statement | 5
Risks of investing
Before you do any investing, there
are some things you need to consider,
including the level of risk you are
prepared to accept.
Factors that will affect your
decision include:
• your investment goals
• the savings you’ll need to reach
your goals
• your age and how many years you
have to invest
• where other parts of your wealth
are invested
• the return you may expect from your
investments, and
• how comfortable you are with
investment risk.
Investment risk
Even the simplest investment comes
with a level of risk. Different investments
have different levels of risk, depending on
the assets that make up the investment.
While the idea of investment risk can
be confronting, it’s a normal part of
investing. Without it, you may not get
the returns you need to reach your
financial goals. This is known as the
risk/return trade-off.
Many factors influence an investment’s
value. These include, but aren’t limited to:
• market sentiment
• changes in inflation
• growth and contraction in Australian
and overseas economies
• legislative changes
• changes in interest rates
• defaults on loans
• company specific issues
• liquidity (the ability to buy or sell
investments when you want to)
• changes in the value of the
Australian dollar
• investments and withdrawals by
other investors, and
• a counterparty not meeting
its obligations eg when buying
securities, the seller may not deliver
on the contract by failing to provide
the securities.
Volatility
The value of an investment with a
higher level of risk will tend to rise
and fall more often and by greater
amounts than investments with lower
levels of risk. That is, it is more volatile.
Periods of volatility can be unsettling
and may occur regularly. You may
find it reassuring to know that, often
investments that produce higher returns
and growth over long periods tend to be
more volatile in the short term.
By accepting that volatility will occur,
you’ll be better able to manage your
reaction to short-term movements.
This will help you stay true to your long-
term investment strategy.
When considering your investment it’s
important to understand that:
• its value, and returns, will vary
over time
• investments with higher long-term
return potential usually have higher
levels of short-term risk
• returns aren’t guaranteed and you
may lose some of your money
• future returns may differ from
past returns
• laws of overseas jurisdictions can
impact returns on international
investments, and
• laws affecting your investment may
change in future.
Diversify to reduce volatility and other risks
Diversification - investing in a range of
investments - is a sound way to reduce
the short-term volatility of a portfolio’s
returns. That’s because different types
of investments perform well in different
times and circumstances. When some
are providing good returns, others may
not be.
Portfolios can be diversified across
different asset classes, industries,
securities and countries as well as across
investment managers with different
approaches.
The more you diversify, the less impact
any one investment can have on your
overall returns. One of the most effective
ways of reducing volatility is to diversify
across a range of asset classes.
Diversification across asset classes is just one way of managing risk. Our Funds diversify across asset classes and investment managers. Please read more about our investment approach in `Our approach to investing’.
A financial adviser can help you clarify goals and assist with creating a financial plan which helps you manage risk and consider issues such as:
• how many years you have to invest
• the savings you’ll need to reach your goals
• the return you may expect from your investments, and
• how comfortable you are with volatility.
6 | Pre Select funds Product Disclosure Statement
Types of assets
Asset classes are generally grouped as defensive, growth or alternatives based on their different characteristics.
Our Funds are usually invested across all these groups because each has different return and volatility characteristics. For example, defensive assets may help to provide returns in a Fund when share markets are weak. On the other hand, growth assets may be included in a Fund because of their potential to produce higher returns than cash in the long term. However, in some market conditions, all types of assets may move in the same direction, delivering low or negative returns at the same time.
The main differences between these types of assets are:
Defensive Growth Alternatives
Asset classes included
Cash and fixed income securities.
Shares and listed property securities.
A very diverse group of assets and strategies. Some examples include infrastructure and hedge funds. Because alternatives are diverse, they may be defensive or growth assets.
How they are generally used
To generate income and stabilise returns.
To provide long-term capital growth and income.
To provide returns that aren’t strongly linked with those of mainstream assets. They may be included for their income, defensive or growth characteristics.
Risk and return characteristics
Expected to produce lower returns, and be less volatile, than growth assets over the long term.
Expected to produce higher returns, and be more volatile, than defensive assets over the long term.
Expected to produce returns and volatility that aren’t strongly linked to mainstream assets such as shares.
Risk and return characteristics of different alternative investments can vary significantly.
Asset classes
Asset classes are groups of similar types
of investments.
Each class has its risks and benefits, and
goes through its own market cycle.
Risks of investing
A market cycle can take a couple of years
or many years as prices rise, peak, fall
and stabilise. Through investing for
the long term, at least through a whole
market cycle, you can improve your
chance of benefiting from a period of
strong returns and growth to offset
periods of weakness.
Pre Select funds Product Disclosure Statement | 7
The following illustration shows
indicative returns and volatility for the
main asset classes over a whole market
cycle. But each market cycle is different,
so unfortunately it isn’t possible to
accurately predict asset class returns or
their volatility. Depending on the
conditions at the time, actual returns
could be significantly different from
those shown.
Indicative volatility
Lower Higher
Higher
Shares
Fixed incomeInd
icat
ive
retu
rns
Alternatives
Listed property securities
Cash
Alternatives
Alternatives
Alternatives
Indicative returns and volatility over a market cycle
Source: NAB Asset Management Services Limited. Alternatives are shown as having many different risk and return outcomes because they are a very diverse group of assets and strategies.
Here are the main asset class risks
and benefits.
Cash
Cash is generally a low risk investment.
Things to consider:
• Cash is often included in a portfolio
to meet liquidity needs and to
stabilise returns.
• The return is typically all income and
is referred to as interest or yield.
• Cash is usually the least volatile type
of investment. It also tends to have
the lowest return over a market cycle.
• The market value tends not to change.
However, when you invest in cash,
you’re effectively lending money to
businesses or governments that could
default on the loans, resulting in a loss
on your investment.
• Many cash funds invest in fixed
income securities that have a very
short term until maturity.
Fixed income (including term deposits)
When investing in fixed income, you’re
effectively lending money to businesses
or governments. Bonds are a common
form of fixed income security.
Things to consider:
• Fixed income securities are usually
included in a portfolio for their
relatively stable return characteristics.
• Returns typically comprise interest
and changes in the market value
of the fixed income security. Fixed
income securities’ values tend to move
in opposite directions to interest
rates. So when interest rates rise, fixed
income securities’ values tend to fall
and when interest rates fall, values can
rise. Short-term fixed are generally
less sensitive to interest rate changes
than longer-term securities.
• While income from fixed income
securities usually stabilises returns,
falls in their market value may result
in a loss on your investment. Market
values may fall due to concern about
defaults on loans or an increase in
interest rates. When interest rates are
low, the risk of rates rising and market
values falling is greatest.
• There are different types of fixed
income securities and these will have
different returns and volatility.
• Investing in fixed income securities
outside Australia may expose
your portfolio to movements in
exchange rates.
Listed property securities
Property securities are listed on share
markets in Australia and around the
world. Listed property securities are also
referred to as Real Estate Investment
Trusts (REITs).
Things to consider:
• Listed property securities are usually
included in a portfolio for their income
and growth characteristics.
• Returns typically comprise income
(such as distributions from REITs) and
changes in REIT values.
• Returns are driven by many factors
including the economic environment
in various countries.
• The global REIT market is far more
diversified than the Australian REIT
market.
• Listed property securities’ returns can
be volatile.
• Investing outside Australia may
expose your portfolio to movements
in exchange rates.
8 | Pre Select funds Product Disclosure Statement
Australian shares
This asset class consists of investments
in companies listed on the Australian
Securities Exchange (and other regulated
exchanges). Shares are also known
as equities.
Things to consider:
• Australian shares can be volatile
and are usually included in a
portfolio for their growth and
income characteristics.
• The Australian share market is less
diversified than the global market
because Australia is currently
dominated by a few industries such as
Financials and Resources.
• Returns usually comprise dividend
income and changes in share prices.
• Dividends may have the benefit of tax
credits attached to them (known as
franking or imputation credits).
• Returns are driven by many factors
including the performance of the
Australian economy.
Global shares
Global shares consist of investments in
companies listed on securities exchanges
around the world.
Things to consider:
• Global shares can be volatile and are
usually included in a portfolio for their
growth characteristics.
• The number of potential investments is
far greater than in Australian shares.
• Returns usually comprise dividend
income and changes in share prices.
• Returns are driven by many factors
including the economic environment
in various countries.
• When you invest globally, you’re less
exposed to the risks associated with
investing in just one economy.
• Investing outside Australia means
you’re exposed to movements in
exchange rates.
Alternatives
These are a very diverse group of
assets. Some examples include hedge
funds, real return strategies, gold,
listed infrastructure securities and
unlisted infrastructure.
Things to consider:
• Because alternatives are diverse, they
may be included in a portfolio for their
defensive or growth characteristics.
• Alternative investments are usually
included in portfolios to increase
diversification and provide returns
that aren’t strongly linked with the
performance of mainstream assets.
• Investment managers include
alternative investments in a portfolio
because they generally expect the
return and diversification benefits of
alternative investments to outweigh
the higher costs often associated
with them.
• Some alternative strategies are
managed to deliver a targeted
outcome. For example, real return
strategies aim to produce returns
exceeding increases in the costs of
living (ie inflation).
• For some alternatives, such as hedge
funds, derivatives may be used
extensively and it can be less obvious
which assets you’re investing in
compared to other asset classes.
• Some alternative investments are
illiquid, which makes them difficult to
buy or sell.
• To access alternative investments
you generally need to invest in a
managed fund that, in turn, invests
in alternatives.
• Because most alternative investments
aren’t listed on an exchange,
determining their value for a fund’s
unit price can be difficult and may
involve a considerable time lag.
• Alternatives invested outside
Australia may expose your portfolio
to movements in exchange rates.
Investment approaches
Investment managers have different
approaches to selecting investments,
which invariably results in different
returns. No single investment approach
is guaranteed to outperform all others
in all market conditions.
There are generally two broad
approaches: passive and active
management.
Passive management
Passive, or index managers, choose
investments to form a portfolio which
will deliver a return that closely tracks
a market benchmark (or index). Passive
managers tend to have lower costs
because they don’t require extensive
resources to select investments.
Risks of investing
Pre Select funds Product Disclosure Statement | 9
Active management
Active managers select investments they
believe, based on research, will perform
better than a market benchmark over the
long term.
They buy or sell investments when their
market outlook alters or investment
insights change.
The degree of active management
affects returns. Less active managers
take small positions away from the
market benchmark and more active
managers take larger positions. Generally,
the larger an investment manager’s
positions, the more their returns will
differ from the benchmark.
Active managers have different
investment styles that also affect their
returns. Some common investment
styles are:
• Bottom-up – focuses on forecasting
returns for individual companies,
rather than the market as a whole.
• Top-down – focuses on forecasting
broad macroeconomic trends and
their effect on the market, rather than
returns for individual companies.
• Growth – focuses on companies they
expect will have strong earnings growth.
• Value – focuses on companies they
believe are undervalued (their price
doesn’t reflect earning potential).
• Income – focuses on generating
a regular income stream through
selecting companies, trusts and other
securities they believe will deliver
income, or through using derivatives
and other strategies.
• Core – aims to produce competitive
returns in all periods.
Ethical investing
Investment managers may take
into account labour standards,
environmental, social or ethical
considerations when making decisions
to buy or sell investments.
We expect our active investment
managers to consider material effects
these factors may have on the returns
from their investments; however, we
don’t require them to. We don’t expect
our passive investment managers to
consider these factors.
Investment techniques
Our investment experts and
investment managers may use different
investment techniques that can change
the value of an investment. Some of the
main investment techniques used in the
Funds are explained below.
Derivatives
Derivatives may be used in any of
the Funds.
Derivatives are contracts that have a
value derived from another source such
as an asset, market index or interest
rate. There are many types of derivatives
including swaps, options and futures.
They are a common tool used to manage
risk or improve returns.
Some derivatives allow investment
managers to earn large returns from
small movements in the underlying
asset’s price. However, they can lose large
amounts if the price movement in the
underlying asset is unfavourable.
Risks particular to derivatives include
the risk that the value of a derivative may
not move in line with the underlying
asset, the risk that counterparties to
the derivative may not be able to meet
payment obligations and the risk that
a particular derivative may be difficult
or costly to trade.
Investment managers, including
Navigator, have derivatives policies
which outline how derivatives are
managed. Information on our Derivative
Policy is available on request.
Currency management
If an investment manager invests in
assets in other countries, its returns in
Australian dollars will be affected by
movements in exchange rates (as well as
changes in the value of the assets).
A manager of international assets may
choose to protect Australian investors
against movements in foreign currency.
This is known as ‘hedging’. Alternatively,
the manager may choose to keep the
assets exposed to foreign currency
movements, or ‘unhedged’.
Returns from exposure to foreign
currency can increase diversification
in a fund.
10 | Pre Select funds Product Disclosure Statement
How we invest your money
Our approach to investing
For over 30 years, our investment
experts have been designing portfolios
using a multi-manager approach, to help
investors achieve their goals.
The four key aspects of this market-
leading investment approach are:
1 Portfolio design
Our multi-asset Funds focus on what
affects investor outcomes the most –
asset allocation.
Each asset class has its own risk and
return characteristics. We allocate money
between asset classes based on the
following beliefs:
• Risks can’t be avoided, but can
be managed
Key to the investment approach is a
unique Investment Futures Framework
(Framework). The Framework guides
our forward-looking approach to
managing risk.
In an unpredictable and constantly
changing world, the Framework helps
continually identify the very wide range
of potential market scenarios – both
good and bad – that could occur.
The Framework also helps our
investment experts analyse how these
scenarios could affect the risks and
returns of the asset classes in the Funds.
The insights from this analysis are used
to work out the combination of asset
classes that they believe will best achieve
a Fund’s objective.
This helps us prepare our Funds for
future market ups and downs.
• Risks and returns vary through time
The Framework shows how the potential
risks and returns of each asset class
could change over the next three to
seven years.
With this information we can adjust our
Funds’ asset allocations to reduce the risk
or improve their return potential.
• Diversification matters
Asset classes perform differently in
different market conditions.
Investing in many asset classes helps
smooth out the Funds’ overall returns,
as asset class ups and downs can offset
one another.
2 Managing the portfolio
Our Funds have different investment
objectives. That’s why our investment
experts select a different mix of assets
and investment managers for each.
The investment managers may be
specialist in-house managers, external
managers or a combination of both.
Our investment experts research
hundreds of investment managers
from around the world and select the
managers they believe are the best for
our Funds.
They are then combined in the Funds
so they complement each other.
This multi-manager approach helps
to reduce risk and deliver more
consistent returns.
You can find out about our current
investment managers at mlc.com.au.
Pre Select funds Product Disclosure Statement | 11
3 Ongoing review
To make sure our Funds are working
hard for investors, we continuously
review and manage them.
This includes adjusting the asset
allocation, investment strategies
and managers.
This may be because our investment
experts’ assessment of the future market
environment has altered or because we
have found new ways to balance risk and
return in our Funds.
4 Portfolio implementation
We deliver better returns by avoiding
unnecessary costs. Our investment
experts do this by carefully managing
cash flows, tax and changes in
our Funds.
12 | Pre Select funds Product Disclosure Statement
Pre Select Conservative Fund ARSN 104 411 583
Investment objective To provide medium-term returns higher than those generally associated with cash and fixed income securities, while providing lower volatility in short-term investment returns than funds with a greater proportion of growth assets.
How the Fund is managed Investment markets are the main driver of the Fund’s investment returns. The Fund’s allocation to investment markets is shown in its target asset allocation and ranges below. The asset allocation has a strong bias to defensive assets and some exposure to growth assets.
Our investment experts actively manage the Fund’s exposure to the risks of investing in markets. Our investment experts do this by:
• Researching and selecting a broad range of mainstream asset classes, and including some exposure to alternative assets and strategies.
• Adjusting the allocations to the asset classes within the defined ranges shown below.
• Researching hundreds of investment managers from around the world and selecting the managers they believe are the best for the Fund. These investment managers, who are mainly active managers, choose many companies and securities in Australia and overseas for investment.
The Fund invests using all aspects of our approach to investing, outlined on page 10.
The Fund may be suited to you if ...
• you want to invest with a bias to defensive assets, with some exposure to growth assets, and
• you are seeking stable returns.
Minimum suggested time to invest
3 years
Target asset allocation and ranges
The Fund will be managed
within these ranges.
The asset allocation will
change over time. The most up
to date information is available
at mlc.com.au on our Fund
Profile Tool for MLC Wrap
and Navigator
68%
Defensive assets
32%
Growth assets
Asset class Target asset allocation (%)
Ranges (%)
Cash 15.5% 0%–30%
Fixed income 45.5% 30%–75%
Defensive alternatives and other
7% 0%–15%
Total defensive assets 68% 58%–78%
Australian shares 15% 0%–25%
Global shares 7% 0%–25%
Listed property securities
7% 0%–15%
Growth alternatives and other
3% 0%–15%
Total growth assets 32% 22%–42%
In addition, most global assets are hedged to the Australian dollar. For benchmark currency hedging levels for global assets please refer to our Fund Profile Tool for MLC Wrap and Navigator at mlc.com.au
Estimated number of negative annual returns
Between 2 and 3 years in 20 years
Investing in the Funds
Pre Select funds Product Disclosure Statement | 13
Pre Select Balanced Fund ARSN 104 412 446
Investment objective To provide medium to long-term returns that are generally higher than those achievable by investing in conservative strategies.
How the Fund is managed Investment markets are the main driver of the Fund’s investment returns. The Fund’s allocation to investment markets is shown in its target asset allocation and ranges below. The asset allocation has an approximately equal exposure to growth and defensive assets.
Our investment experts actively manage the Fund’s exposure to the risks of investing in markets. Our investment experts do this by:
• Researching and selecting a broad range of mainstream asset classes, and including some exposure to alternative assets and strategies.
• Adjusting the allocations to the asset classes within the defined ranges shown below.
• Researching hundreds of investment managers from around the world and selecting the managers they believe are the best for the Fund. These investment managers, who are mainly active managers, choose many companies and securities in Australia and overseas for investment.
The Fund invests using all aspects of our approach to investing, outlined on page 10.
The Fund may be suited to you if ...
• you want to invest in an approximately equal mix of defensive and growth assets, and
• you want a portfolio with some long-term capital growth potential and can tolerate moderate to large changes in value.
Minimum suggested time to invest
5 years
Target asset allocation and ranges
The Fund will be managed
within these ranges.
The asset allocation will
change over time. The most up
to date information is available
at mlc.com.au on our Fund
Profile Tool for MLC Wrap
and Navigator
52%
Defensive assets
48%
Growth assets
Asset class Target asset allocation (%)
Ranges (%)
Cash 8% 0%–20%
Fixed income 39% 20%–60%
Defensive alternatives and other
5% 0%–15%
Total defensive assets 52% 42%–62%
Australian shares 19% 10%–35%
Global shares 21% 5%–35%
Listed property securities
3% 0%–15%
Growth alternatives and other
5% 0%–15%
Total growth assets 48% 38%–58%
In addition, most global assets are hedged to the Australian dollar. For benchmark currency hedging levels for global assets please refer to our Fund Profile Tool for MLC Wrap and Navigator at mlc.com.au
Estimated number of negative annual returns
Between 3 and 4 years in 20 years
14 | Pre Select funds Product Disclosure Statement
Pre Select Growth Fund ARSN 104 410 782
Investment objective To produce higher returns than those expected from conservative and balanced strategies over the long term.
How the Fund is managed Investment markets are the main driver of the Fund’s investment returns. The Fund’s allocation to investment markets is shown in its target asset allocation and ranges below. The asset allocation has a strong bias to growth assets and some exposure to defensive assets.
Our investment experts actively manage the Fund’s exposure to the risks of investing in markets. Our investment experts do this by:
• Researching and selecting a broad range of mainstream asset classes, and including some exposure to alternative assets and strategies.
• Adjusting the allocations to the asset classes within the defined ranges shown below.
• Researching hundreds of investment managers from around the world and selecting the managers they believe are the best for the Fund. These investment managers, who are mainly active managers, choose many companies and securities in Australia and overseas for investment.
The Fund invests using all aspects of our approach to investing, outlined on page 10.
The Fund may be suited to you if ...
• you want to invest with a bias to growth assets, and
• you want a portfolio with a bias to long-term capital growth potential and can tolerate moderate to large changes in value.
Minimum suggested time to invest
6 years
Target asset allocation and ranges
The Fund will be managed
within these ranges.
The asset allocation will
change over time. The most up
to date information is available
at mlc.com.au on our Fund
Profile Tool for MLC Wrap
and Navigator.
32%
Defensiveassets
68%
Growth assets
Asset class Target asset allocation (%)
Ranges (%)
Cash 6% 0%–20%
Fixed income 24% 5%–40%
Defensive alternatives and other
2% 0%–15%
Total defensive assets 32% 22%–42%
Australian shares 28% 20%–45%
Global shares 28% 10%–40%
Listed property securities
4% 0%–15%
Growth alternatives and other
8% 0%–15%
Total growth assets 68% 58%–78%
In addition, most global assets are hedged to the Australian dollar. For benchmark currency hedging levels for global assets please refer to our Fund Profile Tool for MLC Wrap and Navigator at mlc.com.au
Estimated number of negative annual returns
Between 4 and 5 years in 20 years
Pre Select funds Product Disclosure Statement | 15
Pre Select High Growth Fund ARSN 104 411 467
Investment objective To provide higher returns than those expected from conservative, balanced and growth strategies over the long term.
How the Fund is managed Investment markets are the main driver of the Fund’s investment returns. The Fund’s allocation to investment markets is shown in its target asset allocation and ranges below. The asset allocation invests predominately in growth assets with a small exposure to defensive assets.
Our investment experts actively manage the Fund’s exposure to the risks of investing in markets. Our investment experts do this by:
• Researching and selecting a broad range of mainstream asset classes, and including some exposure to alternative assets and strategies.
• Adjusting the allocations to the asset classes within the defined ranges shown below.
• Researching hundreds of investment managers from around the world and selecting the managers they believe are the best for the Fund. These investment managers, who are mainly active managers, choose many companies and securities in Australia and overseas for investment.
The Fund invests using all aspects of our approach to investing, outlined on page 10.
The Fund may be suited to you if ...
• you want to invest with a strong bias to growth assets, and
• you want a portfolio with a strong bias to long-term capital growth potential and can tolerate large changes in value.
Minimum suggested time to invest
7 years
Target asset allocation and ranges
The Fund will be managed
within these ranges.
The asset allocation will
change over time. The most up
to date information is available
at mlc.com.au on our Fund
Profile Tool for MLC Wrap
and Navigator.
19%
Defensive assets
81%
Growth assets
Asset class Target asset allocation (%)
Ranges (%)
Cash 5% 0%–15%
Fixed income 13% 0%–30%
Defensive alternatives and other
1% 0%–15%
Total defensive assets 19% 9%–29%
Australian shares 32% 20%–50%
Global shares 36% 20%–50%
Listed property securities
4% 0%–15%
Growth alternatives and other
9% 0%–15%
Total growth assets 81% 71%–91%
In addition, some global assets are not hedged to the Australian dollar. For benchmark currency hedging levels for global assets please refer to our Fund Profile Tool for MLC Wrap and Navigator at mlc.com.au
Estimated number of negative annual returns
Between 4 and 5 years in 20 years
16 | Pre Select funds Product Disclosure Statement
Investing in the Funds
How to invest
Investment in the Funds is only available
through a Portfolio Service that we
offer via a subsidiary of the NAB Group.
We refer to people who invest through
a Portfolio Service as indirect investors.
As an indirect investor you may use the
information in this PDS to direct the
Portfolio Service to acquire units in a
Fund on your behalf. To access any of
the Funds, you will need to complete
the application form for the relevant
Portfolio Service.
To make an additional investment or
withdrawal from a Fund you will have
to direct the Portfolio Service to do
so. We will provide confirmation of
transactions, transaction statements,
tax statements and financial reports
to the Portfolio Service.
You should also refer to the relevant
Portfolio Service offer document for your
rights and entitlements, including any
relevant ‘cooling off’ provisions. This is
available from your financial adviser.
Eligibility
This offer to invest in the Funds is made
in Australia in line with Australian laws
and will be regulated by these laws.
As at the date of the PDS, the Funds are
sold predominately through a public
offering outside of the US, which means
the Funds are limited in the amount
of investment it will accept from ‘US
persons’ (as defined under Regulation S
of the US Securities Act of 1933).
Investor information relating to US
citizens, residents for US tax purposes,
or other foreign residents for tax
purposes, may be reported to the
relevant tax authorities.
Applications and withdrawals
We have the discretion to accept or refuse
any new or additional application for
units in the Funds without explanation.
Applications received by us from your
Portfolio Service before 12:00pm
(Melbourne time) on any Business Day
will receive that day’s unit price.
Applications received after 12:00pm will
receive the next Business Day’s unit price.
You should check with your Portfolio
Service to determine when applications
and redemptions will be made by them
to us on your behalf. Please be aware that
there may be a delay between when you
instruct your Portfolio Service to acquire
units and when units are allocated to
your Portfolio Service operator.
Application money received will be held
in trust until processed. We will not
process applications unless we have
received all required information from
your Portfolio Service. If we’re unable to
process an application within 30 days of
receipt we will return the money to your
Portfolio Service. Any interest earned
during this time will be kept by us.
Withdrawal requests received by the
Funds from your Portfolio Service
before 12:00pm (Melbourne time) on
any Business Day will normally receive
that day’s unit price. Requests received
after 12:00pm will normally receive the
next Business Day’s unit price. Once
lodged, withdrawal requests may not
be withdrawn except with our consent.
Who can invest?
Superannuation funds, companies,
partnerships, trusts and individual
investors may invest through a
Portfolio Service.
Investor rights
As an indirect investor in any of the
Funds, you are not a unit holder in
that Fund. Instead, the operator of the
Portfolio Service is the unit holder in the
Fund. Accordingly, you do not acquire the
rights of a unit holder of the Funds, or
any direct interest in each of the Funds.
For example:
• you will not receive reports directly
from the Funds, but you will get
updates from your Portfolio Service
• income distributions from each
Fund are paid to the Portfolio
Service operator or administrator
and allocated to your account, in
accordance with the relevant Portfolio
Service offer document
• you do not vote at unit holder
meetings of the Funds
• there will be a time lag from when you
request an investment or redemption
to when it is processed
• information is not directly available
from the Funds however you can
contact your Portfolio Service with
your requests, and
• any complaints you have should be
directed to your Portfolio Service.
Pre Select funds Product Disclosure Statement | 17
Withdrawal requests will be actioned
by us promptly and we generally seek
to make payments within 4 Business
Days to your Portfolio Service. Payment
may be delayed, for example, if
underlying assets need to be sold. In
certain circumstances, such as when
there are adverse market conditions,
we may suspend withdrawals. In certain
circumstances, we may also process
requests in instalments over a period
of time.
In circumstances where withdrawals
are delayed, suspended or being paid in
instalments, the unit prices used for a
withdrawal will be those available on the
day the withdrawal takes effect, rather
than the day of the withdrawal request.
We may deduct from a withdrawal
payment any amount owed under the
Constitution.
The timing for the processing and pricing
of application and withdrawal requests
will also be subject to the rules of your
Portfolio Service. Please refer to the
relevant Portfolio Service offer document
for further information.
Income distributions
Our current practice is to generally
distribute the net taxable income of the
Funds to investors for each financial year
(including net capital gains and any net
gains on currency management).
As the Funds are Attribution Managed
Investment Trusts (AMITs), we have the
discretion to accumulate income (instead
of distributing all of the income) and if
we do so, the accumulated income will
be reflected in the unit price. We intend
to continue our current practice to
distribute all of the income (including
Australian taxation information
The Funds themselves should not be
liable for tax on their net earnings.
Managed investment schemes do not
pay tax on behalf of investors. Rather
investors should include their proportion
of the Funds’ net earnings as income
in their tax returns. Any net losses are
retained by the Funds and used to offset
future matching gains.
The unit price of units issued before
a distribution will include income
accumulated in the Funds. The income
that has been accumulating will generally
be distributed. You may potentially have
taxation liabilities on that income.
Depending on an investor’s
circumstances, a revenue or capital gain
or loss may arise when units in the Funds
are sold, switched or redeemed.
The AMIT regime
A specific regime for the taxation of
managed investment schemes (AMIT
regime) was introduced on 5 May 2016.
The AMIT regime is designed to provide
greater flexibility for managed funds
and fairness for their investors. We
elected for the AMIT regime apply for the
Funds for the 2017/2018 financial year
and onwards.
Under the AMIT regime, investors are
taxed on income that is attributed to
them on a “fair and reasonable” basis for
each financial year.
Under the AMIT regime it’s not necessary
for a Fund to distribute all its income
(including capital gains) in order to
ensure that the Fund doesn’t pay tax.
Instead we have the discretion to
any capital gains) for each year.
We will notify you if this changes.
Each Fund may distribute income
quarterly within 60 days of the end of
the quarter based on the unit holder’s
holding. There may be periods in which
no distributions are made or the Funds
may make additional distributions.
Distributions will be expressed as
cents per unit. Distributions will be
paid to your account by your Portfolio
Service in accordance with the relevant
Portfolio Service offer document and
any instructions you provide to the
Portfolio Service. Your reporting rights
and entitlements will be outlined in the
relevant Portfolio Service offer document.
Distributions, determined in accordance
with the Funds’ Constitutions, are
generally calculated based on the Funds’
net income at the end of the distribution
period divided by the number of units
on issue.
Please contact your Portfolio Service
for details of how to receive any income
distributions from the Funds.
How managed investment schemes are taxed
Investing in a managed investment
scheme is likely to have tax consequences.
Because this PDS is not a tax guide and
tax laws are complex and change from
time to time, we strongly recommend
that you obtain professional tax
advice in relation to your own personal
circumstances. This applies whether
you are an Australian resident or a non-
resident for tax purposes.
18 | Pre Select funds Product Disclosure Statement
accumulate income in the Fund and
it would be reflected in the unit price.
Taxable income is attributed to investors,
even if a Fund doesn’t distribute
its income.
However, we intend to continue our
current practice of distributing all of a
Fund’s income (including any capital
gains) to our investors each financial
year. We will notify you if this changes.
The details of the taxable income
attributed to you will be set out in
an AMIT Member Annual Statement
(AMMA Statement), which will contain
all necessary tax information. The tax
payable (if any) depends on your
individual tax profile and applicable
tax rate.
If you disagree with our attribution of
taxable income, you can object to the
Commissioner of Taxation. If you decide
to take this course, it is important that
you obtain professional tax and legal
advice. The Constitution provides for
you to give us notice before making an
objection, so please do so and we will
work with you to try to resolve the issue.
Multiple classes of units
All of the Funds have multiple unit
classes. Only one class of units in each
of the Funds (Pre Select class) is offered
under this PDS. Other classes of units with
different fee structures may be offered
under other disclosure documents.
Unit pricing
The overall value of your investment in
the Funds will change according to the
unit price and the number of units held.
The unit price will reflect the
performance of the underlying assets,
income earned, fees, expenses and taxes
paid and payable. The performance of
the underlying assets is influenced by
movements in investment markets.
We usually calculate the unit price as at
the end of each Business Day and use
robust unit pricing policies to do this.
Our unit pricing philosophy is available
at mlc.com.au. For more details on our
policies relating to unit pricing please
contact us.
If there is a unit pricing error that
substantially impacts the Funds’
performance, an adjustment may
be made. This will generally involve
reprocessing affected transactions
using the corrected unit price and/or
by adjusting your account. The value
of your investment could be increased
or decreased as a result.
Business Days are generally days on
which banks are open for business in
Melbourne (except Saturday, Sunday
and public or bank holidays or such other
days as we determine from time to time).
We have the discretion to declare any
day to be a Business Day.
Unitholders’ liability
The Funds’ underlying assets are owned
by the Responsible Entity on behalf of
direct investors. The Funds’ constitutions
limit unitholders’ liability to their
investment in the Funds.
Cooling off
You should refer to your Portfolio
Service offer document in relation
to any cooling off rights that may
apply to your investment in the Funds.
The right to ‘cool off’ does not apply
to direct investments in these Funds.
Investing in the Funds
Pre Select funds Product Disclosure Statement | 19
The fees and costs outlined in this PDS are for these Funds only.
You should read all the information about fees and costs because it is important to understand their impact on your investment in
the Funds.
As the Funds are only available for investment via a Portfolio Service, you will need to consider the fees and other costs of the
Portfolio Service when calculating the total cost of your investment.
If you consult a financial adviser you may also pay an additional fee that will be set out in the Statement of Advice between you
and your financial adviser.
This section shows fees and other costs that you may be charged in relation to the Funds. These fees and costs may be deducted from
your money, from the returns on your investment or from the assets of the relevant managed investment scheme as a whole.
The information in this table can be used to compare fees and costs between different managed investment schemes.
All fees are shown inclusive of GST and net of Reduced Input Tax Credits (where applicable).
Fees and other costs
DID YOU KNOW?
Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns.
For example, total annual fees and costs of 2% of your account 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 Fund or your financial 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 www.moneysmart.gov.au has a managed funds fee calculator to help you check out different fee options.
20 | Pre Select funds Product Disclosure Statement
Type of fee or cost Amount How and when paid
Fees when your money moves in or out of the managed investment products.
Establishment fee The fee to open your investment.
Nil There is no Establishment fee.
Contribution fee The fee on each amount contributed to your investment.
Nil There is no Contribution fee.
Withdrawal fee The fee on each amount you take out of your investment.
Nil There is no Withdrawal fee.
Exit fee The fee to close your investment.
Nil There is no Exit fee.
Management costs1,2
The fees and costs for managing your investment.
Management fee: • Pre Select Conservative Fund: 0.60% pa of the Fund’s net asset value
• Pre Select Balanced Fund: 0.65% pa of the Fund’s net asset value
• Pre Select Growth Fund: 0.70% pa of the Fund’s net asset value
• Pre Select High Growth Fund: 0.85% pa of the Fund’s net asset value
The Management fee is calculated daily on the relevant Fund’s net asset value and reflected in the daily unit price. It is paid from the assets of the relevant Fund and is not required to be paid by you separately.
Wholesale clients (as defined in the Corporations Act 2001 (Cth)) may be able to negotiate this fee by contacting us.
Estimated indirect costs3 • Pre Select Conservative Fund: 0.00% pa of the Fund’s net asset value
• Pre Select Balanced Fund: 0.00% pa of the Fund’s net asset value
• Pre Select Growth Fund: 0.00% pa of the Fund’s net asset value
• Pre Select High Growth Fund: 0.00% pa of the Fund’s net asset value
This is made up of:
• Estimated performance related costs, and
• Estimated other indirect costs
Indirect costs are costs and expenses incurred by the Fund that are not charged as a Management fee but are expected to reduce the net return of the relevant Fund and are reflected in the daily unit price.
Service fees
Switching fee The fee for changing Funds.
Not applicable. Not applicable.
1 See ‘Additional explanation of fees and costs’ in this section for further details.2 Rounded to two decimal places. 3 The estimated indirect costs are based on costs incurred for the 12 months to 30 June 2018, please see ‘Additional explanation of fees and costs’
for further details.
Fees and other costs
Pre Select funds Product Disclosure Statement | 21
Example of annual fees and costs for the Pre Select Balanced Fund
This table gives an example of how the fees and costs for this managed investment product can affect your investment over a 1 year
period. You should use this table to compare this product with other managed investment products.
EXAMPLE: Pre Select Balanced Fund
Balance of $50,000 with a contribution of $5,000 during the year¹
Contribution Fees 0% For every additional $5,000 you put in, you will be charged $0.
PLUS
Management CostsManagement fee Indirect costs Total
0.65% 0.00% 0.65%
And, for every $50,000 you have in the Fund you will be charged:
$325 + $0 = $325 each year.
EQUALS Cost of the Fund
If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees from:
$325
What it costs you will depend on the Fund you choose.
What it costs you will depend on the fees you negotiate with the Fund, your IDPS operator or your financial adviser.
1 This example assumes the $5,000 additional investment occurs at the end of the year.
Example of annual fees and costs for the Pre Select Growth Fund
This table gives an example of how the fees and costs for this managed investment product can affect your investment over a 1 year
period. You should use this table to compare this product with other managed investment products.
EXAMPLE: Pre Select Growth Fund
Balance of $50,000 with a contribution of $5,000 during the year¹
Contribution Fees 0% For every additional $5,000 you put in, you will be charged $0.
PLUS Management Costs
Management fee Indirect costs Total
0.70%
0.00%
0.70%
And, for every $50,000 you have in the Fund you will be charged:
$350 + $0 = $350 each year.
EQUALS Cost of the Fund
If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees from:
$350
What it costs you will depend on the Fund you choose.
What it costs you will depend on the fees you negotiate with the Fund, your IDPS operator or your financial adviser.
1 This example assumes the $5,000 additional investment occurs at the end of the year.
22 | Pre Select funds Product Disclosure Statement
Additional explanation of fees and costs
Management costs
The management costs are fees and
costs for investing the Funds’ assets.
The management costs include the
Management fee and do not include
buy/sell spreads or transaction costs.
Management costs are made up of the
Management fee and indirect costs
described below.
Management fee
The Management fee includes fees
charged by the Responsible Entity, fees
paid to investment managers appointed
directly by us and other expenses
incurred in operating the Funds, such
as custody costs, registry costs, auditing
fees and tax return fees.
Indirect costs
The Funds may also incur costs and
expenses that won’t be charged as a
Management fee but are expected to
reduce the net return of the Funds.
These indirect costs are reflected in the
daily unit price and any reporting on the
performance of the Funds.
Indirect cost amounts included in this
document are based on actual costs
incurred for the 12 months to 30 June
2018. We expect the estimated indirect
costs for the Funds for the 12 months to
30 June 2019 and onward to be 0.01% pa.
Amounts may vary from time to time
and you will not be given advance notice
of any changes to these amounts. You
should refer to mlc.com.au for updated
amounts.
Fund (A)1
Estimated transaction costs as at 30 June 2018
(B)
Estimated transaction costs recovered from buy/sell spread
(C = A – B)
Estimated transaction costs reducing return of the Fund
Pre Select Conservative Fund
0.10% 0.03% 0.07%
Pre Select Balanced Fund
0.13% 0.04% 0.09%
Pre Select Growth Fund
0.16% 0.03% 0.13%
Pre Select High Growth Fund
0.18% 0.04% 0.14%
1 Estimate costs are based on each Fund’s net asset value.
These costs are not included in the management costs and are an additional cost to you.
No part of the transaction costs are paid to us or any investment managers.
Fees and other costs
Indirect costs are made up of:
• Performance related costs
Performance related costs are amounts that investment managers may charge
when their performance exceeds a specified level. This is independent of the
overall performance of the Funds and therefore the amounts may be payable to
the investment managers even if the Fund itself produces negative performance.
Different performance related costs may be charged by different investment
managers and will vary depending upon the investment managers’ performance.
• Other indirect costs
Underlying investment funds will generally charge a management fee and
expense recoveries.
Transaction costs
When assets in a Fund or in underlying investments are bought or sold, costs such as
brokerage, stamp duty and settlement costs are incurred. Costs may also be incurred
when the market process for purchasing assets causes the price paid to be higher than
the value of the assets immediately after the purchase transaction, for example where
bid/ask spreads are incurred. The estimated transaction costs for the financial year to
30 June 2018 are as follows:
Pre Select funds Product Disclosure Statement | 23
Buy/sell spreads
You incur the buy/sell spread when you buy or sell units in the Fund. The current
buy/sell spreads are:
Fund Buy amount Sell amount
Pre Select Conservative Fund 0.05% 0.10%
Pre Select Balanced Fund 0.10% 0.10%
Pre Select Growth Fund 0.10% 0.10%
Pre Select High Growth Fund 0.10% 0.10%
This means that for every $5,000 you contribute to or withdraw from a Fund, you will
incur costs of:
Fund Contribution amount
Withdrawal amount
Pre Select Conservative Fund $25 $50
Pre Select Balanced Fund $50 $50
Pre Select Growth Fund $50 $50
Pre Select High Growth Fund $50 $50
Reimbursable expenses
We are entitled to be reimbursed from
the Funds for all costs and expenses
incurred in acting as Responsible Entity
or in relation to the administration and
management of the relevant Funds.
The expenses may include, but are
not limited to, PDS preparation and
printing costs.
We currently pay these costs and
expenses out of the Management fee
and do not charge them to you as an
additional cost.
Switching charges
There is no charge for switching.
However, you may incur other expenses
applicable to each transaction such as
buy/sell spreads.
Financial adviser remuneration
Your financial adviser does not receive
payments (remuneration) from us in
respect of the issue of units in the Funds
offered under this PDS.
Non-monetary benefits
We keep a register detailing certain
non-monetary benefits that we receive
(e.g. benefits valued between $100 and
$300, genuine education or training
and information technology software or
support). You can review an extract of
the register by contacting your Portfolio
Service. Please be aware that we may
charge you for the cost of providing this
information to you.
Changes to fees and costs
We may vary fees or introduce new
fees up to the maximums described in
the Funds’ Constitutions, without
your consent.
Under the constitution the maximum
fee payable to the Responsible Entity is:
• a Management fee of 3% pa of the net
asset value of the relevant class of
units of the Fund
• a contribution/entry fee of 5% of
the application money (currently
not charged)
• an withdrawal fee of 5% of the net
asset value per unit in the Fund in
respect of each withdrawn unit in the
Fund (currently not charged), and
• an exit fee of 5% of the redemption
proceeds (currently not charged).
We are entitled to recover expenses
directly from the Funds. Currently
we pay them out of the Management
fee. If this changes we will notify your
Portfolio Service.
We will give your Portfolio Service
30 days’ notice of any increases in fees.
No prior notice will be given in respect
of changes to transaction costs or
buy/sell spreads. For updated details
go to mlc.com.au
Fees paid to NAB Group companies
We may use the services of NAB Group
companies where it makes good business
sense to do so and will benefit our
unitholders.
Examples of such service providers
include lenders, custody and registry
operators and investment managers.
Amounts paid for these services are
always negotiated on an arm’s length
basis and are included in the fees
detailed in this PDS.
24 | Pre Select funds Product Disclosure Statement
Changes to the Funds
We may make changes to the Funds
(and the information in this PDS) at our
discretion including, but not limited to,
terminating the Funds. Some changes
may be made without prior notice,
including but not limited to closing
the Funds to new applications, and
changes to the investment strategy,
asset allocation, investment managers
and service providers.
Where possible we will give your Portfolio
Service 30 days’ advance written notice
of any materially adverse change. You
can contact your Portfolio Service to
obtain copies of these notices. Changes
that are not materially adverse will be
made available at mlc.com.au
You should check the website for the
latest information or you can obtain a
paper copy of any updated information
free of charge on request.
Resolving complaints
Your Portfolio Service offer
document contains details of the
complaints procedure.
Additional Information
Keeping you informed
mlc.com.au Provides you access to information about your account and investments. Also gives you resources to help build your knowledge on super, retirement and investing.
Reporting All relevant reports such as confirmation of transaction reports (daily), distribution statements (quarterly), tax statements, financial statements and financial report (annually) are provided to your Portfolio Service.
Constitution This information is available on request, free of charge.
Performance history
Unit Pricing Policy (including discretions register)
Derivatives Policy
Privacy Policy
Product Disclosure Statement updates
You can obtain a paper copy of the PDS on request free of charge by contacting us or by visiting the website mlc.com.au. The PDS can be updated or replaced from time to time.
Pre Select funds Product Disclosure Statement | 25
Your notes
26 | Pre Select funds Product Disclosure Statement
Your notes
Pre Select funds Product Disclosure Statement | 27
A148397-0119
For more information call MLC from anywhere in Australia on 132 652 or contact your financial adviser.
Postal address
Navigator Australia Limited
PO BOX 2567
Melbourne VIC 3001
Registered office
Ground Floor, MLC Building
105–153 Miller Street
North Sydney NSW 2060
mlc.com.au