Benefits of investing in the Paradice Australian Mid Cap Fund

The Investment Manager believes that there is opportunity to find value no matter where we are in the economic cycle. By building a diversified portfolio of investments that exhibit four key characteristics (undervaluation, business quality, strong financial metrics and shareholder-friendly boards) the Fund aims to generate strong, long term risk-adjusted returns.

Other significant benefits of investing in the Fund may include:

• access to Paradice's investment expertise;

• active risk management (through the form of risk spreading);

• access to investment opportunities that individual investors often cannot achieve;

• managed funds can often invest for less cost than ordinary investors can achieve individually;

• generally, you can add to or withdraw your investment daily;

• you have the right to receive any distributions we make from the Fund (usually semi-annually). Distributions may also carry tax credits;

• you can also receive capital gains (or suffer losses) when you dispose of your investment such as by exiting the Fund or selling your units; and
• a robust compliance and governance structure with a trusted responsible entity and legal rights under the Constitution of the Fund.

The Fund is primarily designed for investors seeking superior medium to long term capital growth from exposure to a diversified portfolio of quality companies. Investors need to be comfortable with the short term fluctuations inherent in equity investments.

About the Fund

The Paradice Australian Mid Cap strategy was established in September 2007 by portfolio manager/analysts Matthew Riordan and John Lake. In February 2018 James McBeath joined the team as portfolio manager/analyst. 

The Fund typically invests in 50-70 companies listed outside of the S&P/ASX 50 with a market cap lower limit of $400m, providing investors with an exposure to a diversified portfolio of emerging Australian businesses.

Investment style

The Fund employs a long term 'bottom-up' approach to investment.

Paradice believes equity markets are often inefficient due to investor emotion, short-term thinking and too much reliance on a single aspect of a company's financial health - it's profit and loss statement. Our key focus is on management, current and future cash flows and the quality of the balance sheet.

Paradice's expertise lies in evaluating a company's market position taking into account all factors from balance sheet, macroeconomic drivers through an extensive visitation program.

How we invest your money

Investment approach

Paradice aims to buy shares which it believes are underpriced and expects to grow at rates greater than the market. Paradice's strategy is to favour well-managed, good value companies that have significant growth opportunities through their comparative advantage. This comparative advantage can be via a combination of a better product or service, a more efficient organisational model, a favourable niche or a commanding leadership position within their industry. Paradice believes a good business requires good products and services and good execution.

The key to identifying these investment opportunities lies in Paradice's extensive insight and analysis of companies and the industries to which they belong. This is achieved through an intense company visitation program and its experienced investment professionals using proven valuation techniques and models.

Asset allocation and investment restrictions

In seeking to achieve the investment objective, the Fund will typically invest in Australian and New Zealand mid capitalisation companies. Investment is generally restricted to companies or unit trusts/schemes listed on the ASX and to equivalent stocks listed on the New Zealand Stock Exchange at the time of the initial investment. The Fund may also invest in securities listed in the ASX Top 50 but outside the 20 leaders. The Fund will generally have between 30 and 80 securities. In the event that the Fund receives an application or redemption, the Fund may buy or sell equities on market prior to that application or redemption being reflected in the Net Asset Value of the Fund. In the case of an application, this may result in the Fund being temporarily leveraged. Such temporary leverage may also occur if application monies are equitized and ultimately not received by the Fund.

Asset ranges

• Australian & New Zealand equities: 90%-100%

• Cash: 0%-10%