WHOLESALE TERMS

A managed fund is an investment vehicle, which groups of individuals invest money, towards the purchase of a pool of investments, where investors do not have day to day control over the investment. The beneficial interest in the assets is divided into units that are issued to each investor. Each unit is equal to another in terms of its rights and entitlements. Oli Wholesale Funds are designed to cater for professional investors with significantly higher minimum investment amounts. Typically, investors with $200,000 or more to invest can access Oli Wholesale Funds and enjoy low wholesale fees and an extensive choice of investment options.

1. The Responsible Entity

Oli Capital Pty. Ltd. is the responsible entity for the Fund. We are responsible for the day-to-day operation of the Fund and for ensuring it complies with the Fund’s constitution (“Constitution”) and relevant laws. This responsibility includes establishing, implementing and monitoring the Fund’s investment objective and strategy. We are the issuer of units in the Fund. Our responsibilities and obligations as the responsible entity of the Fund are governed by the Fund’s Constitution as well as the Corporations Act 2001 (Cth) (“Corporations Act”) and general trust law.

2. The Investment Manager

Oli Capital Pty. Ltd. ("Oli Capital") is the investment manager of the fund. As the investment manager, Oli Capital will make investment decisions in relation to the fund. Oli Capital’s goal is to provide attractive returns while maintaining a strong culture of risk management and long-term discipline. Oli Capital’s investment process emphasises well researched fundamental economic and credit analysis to identify value in market sectors and individual securities. It takes moderate risk across many different portfolio positions to ensure that no single risk dominates returns.

3. Benefits of investing in the ASX Equity Long & Short Fund – Wholesale Class

The Fund is an actively managed portfolio of fixed interest securities predominantly denominated in Australian and New Zealand currencies. Benefits of investing in the Fund are:

3.1 Investment Process

Supported by a deep global presence, the Fund benefits from Oli Capital’s thought leadership and time-tested investment process, which guides portfolio construction via a top-down macroeconomic outlook and rigorous bottom-up credit analysis.

 

3.2 Expertise

Dedicated experienced investment professionals focused on the ASX listed stock who provide coverage of active investment opportunities.

3.3 Diversification and Active Management

  • With a primary focus on ASX listed stock, the Fund may provide diversification benefits amongst an allocation to other asset classes, such as equities.

  • The Fund aims to provide diversified exposure to various sectors of the ASX listed stock, which can improve risk-adjusted returns.

  • The Fund is actively managed, which allows Oli Capital to focus on securities regarded by Oli Capital to have the strongest risk versus return attributes and avoid securities that are regarded by Oli Capital to have insufficient value or a likelihood of capital loss.

3.4 Income and Capital Growth Potential

The Fund seeks to provide a regular income stream by way of half-yearly distributions (the RE may change the distribution frequency without notice).

3.5 Regular Reporting

Monthly, quarterly and annual reporting is provided to keep you up to date on your investments. Please note that Oli Capital does not guarantee the repayment of capital or any rate of return or the Fund’s investment performance.

4. Risks of managed investment schemes

All investments carry risk. Different investment strategies may carry different levels of risk, depending on the assets acquired under the strategy. Assets with the highest long-term returns may also carry the highest level of short-term risk. The significant risks below should be considered in light of your risk profile when deciding whether to invest in the Fund. Your risk profile will vary depending on a range of factors, including your age, your investment time frame (how long you wish to invest for), your other investments or assets you may have and your risk tolerance. The significant risks of the Fund are described below.

 

We do not guarantee the liquidity of the Fund’s investments, repayment of capital or any rate of return or the Fund’s investment performance. The value of the investments will vary. The level of returns will vary and future returns may differ from past returns. Returns are not guaranteed and you may lose money by investing in the Fund. Laws affecting managed investment schemes may also change in the future.

 

Oli Capital does not offer advice that takes into account your personal financial situation, including advice about whether the Fund is suitable for your circumstances. If you require personal financial advice, you should contact a licensed financial adviser.

 

4.1 MARKET RISK

The market price of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably. Securities may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates, adverse changes to credit markets, global political instability, or adverse investor sentiment generally. The value of a security may also decline due to factors which affect a particular industry or industries, such as labour shortages or increased production costs and competitive conditions within an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously.

 

Further, changes in tax, legal and economic policy, political events and technology failure can all directly or indirectly create an environment that may influence the value of your investments.

 

4.2 INTEREST RATE RISK

Interest rate risk is the risk that fixed income securities and other instruments in the Fund’s portfolio will decline in value because of an increase in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by a Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Interest rate changes can be sudden and unpredictable, and the Fund may lose money as a result of movements in interest rates. The Fund may not be able to hedge against changes in interest rates or may choose not to do so for cost or other reasons. In addition, any hedges may not work as intended.

 

4.3 CREDIT RISK

The Fund could lose money if the issuer or guarantor of a fixed income security, or the counter-party to a derivative, repurchase agreement or a loan of portfolio securities, is unable or unwilling, or is perceived (whether by market participants, rating agencies, pricing services or otherwise) as unable or willing to make timely principal and/or interest payments, or to otherwise honour its obligations. The downgrade of the credit of a security held by the Fund may decrease its value. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings. Measures such as average credit quality may not accurately reflect the true credit risk of a fund. This is especially the case if the Fund consists of securities with widely varying credit ratings. Therefore, if a fund has an average credit rating that suggests a certain credit quality, the fund may in fact be subject to greater credit risk than the average would suggest. This risk is greater to the extent the fund uses leverage or derivatives in connection with the management of the fund. Bonds are subject to the risk that litigation, legislation or other political events, local business or economic conditions, or the bankruptcy of the issuer could have a significant effect on an issuer’s ability to make payments of principal and/or interest.

 

4.4 CURRENCY RISK

The Fund may invest, directly or indirectly, in other countries, and if their currencies change in value relative to the Australian dollar, the value of the investment can change. The Fund may also, directly or indirectly, take currency positions with or without owning securities denominated in such currencies. Any foreign currency exposure limits and hedging policies of the Fund are outlined in the Investment Guidelines section (see “5. How we invest your money”). There can be no assurance that the Fund will be hedged at all times or that the Investment Manager will be successful at employing the hedge.

 

4.5 DERIVATIVES RISK

The Fund may use Derivatives, directly or indirectly, for hedging purposes and/or for investment purposes. The value of a Derivative is derived from the value of an underlying asset. This involves basis risk as the value of a Derivative may not move perfectly in line with the physical security. Therefore, the Derivative positions cannot be expected to perfectly hedge the risk of the physical security.

 

Other risks associated with Derivatives may include:

  • loss of value because of a sudden price move or because of the passage of time;

  • potential illiquidity of the Derivative;

  • the Fund being unable to meet payment obligations as they arise;

  • potential for leverage risk (this is discussed in the Reference Guide);

  • the counter-party to any Derivative not being able to meet its obligations under the contract; and

  • significant volatility in prices.