The aims of the Trust are to grow the value of your investment over the long term via a combination of capital growth and income, by investing in a diversified portfolio of Australian shares, and to provide a total return (after fees) that exceeds the S&P/ASX 300 Accumulation Index measured on a rolling three (3) year basis. 

The aims of the Trust are to grow the value of your investment over the long term via a combination of capital growth and income, by investing in a diversified portfolio of Australian shares, and to provide a total return (after fees) that exceeds the S&P/ASX 300 Accumulation Index measured on a rolling three (3) year basis. 

Benefits of investing in the Trust

The Trust is an actively managed portfolio of Australian listed companies that offer good value that aims to grow the value of your investment over the long term through a combination of capital growth and income.

The significant benefits of investing in the Trust include:

• Access to investment opportunities Investing in the Trust means that your money is pooled with that of other investors. This provides the Trust with the investment buying power not often available to you as an individual investor with smaller amounts to invest. This means you can gain access to investment markets and risk management techniques that would not normally be accessible to individual retail investors.

• Professional management Perennial Value's investment professionals manage the Trust using a disciplined investment approach aimed at delivering returns in excess of the relevant benchmark.

• Right to distributions (if any) Investing in the Trust means you may receive regular income from your investments in the Trust in the form of  distributions. However, there may be times when  distributions cannot be made, or are lower than expected.

• Easy access to your information For the latest available information on the Trust, you can visit www.perennial.net.au, log on to Perennial Online, contact a Client Services Representative on 1300 730 032  (+612 8274 2777 New Zealand), email  invest@perennial.net.au or speak to your financial adviser.

Risk Level - High

High risk of short-term capital loss compared to other investment types but with the potential to deliver higher investment returns over the minimum suggested timeframe.

Investor Suitability

The Trust may be suitable for investors with an investment horizon of five or more years, who are seeking exposure to a portfolio of Australian value oriented' companies.

The Trust may be suitable for investors with an investment horizon of five (5) or more years, who are seeking regular tax effective income through the provision of monthly distributions.

About the Trust

The Trust aims to achieve its objective by investing into the Perennial Value Australian Shares Trust.

Description of Trust

The Trust invests in a diversified portfolio of companies listed (or soon to be listed) on the ASX which Perennial Value, the investment manager, believes have sustainable operations and whose share prices offer good value. The cornerstone of this approach is a strong emphasis on company research. The aim is to develop a detailed understanding of each company before committing investors' funds.

The Trust is authorised to utilise derivative instruments for risk management purposes, subject to the specific restriction that they cannot be used to gear portfolio exposure.

For reasons of investment efficiency, the Trust may gain its exposure by holding units in other Perennial Trusts and/or through direct investment holdings.

Labour standards, environmental, social and ethical considerations

Perennial Value takes labour standards, environmental, social and ethical considerations into account when selecting, retaining or realising investments. As a signatory to the United Nations-backed Principles for Responsible Investment, Perennial Value has incorporated environmental, social and corporate governance (ESG) principles into its investment processes. Perennial Value believes that a holistic view of investments including consideration of ESG factors will promote a well-rounded approach to investing with better return outcomes for clients. For further information, please visit the ESG section of Perennial's website www.perennial.net.au.

How we invest your money

Investment philosophy 

Perennial Value is a specialist active Australian equities manager, whose investment process is based on a value' stock picking investment style. Perennial Value holds the belief that investment markets are not fully efficient as asset prices are sometimes driven by irrational influences. As a value investor, Perennial Value aims to buy good businesses that are undervalued, with an underlying belief that good businesses are eventually recognised by markets and re-rated to overall market multiples. The Trust aims to achieve outperformance of 3% p.a. above the S&P/ASX300 Accumulation Index, over rolling three year periods.

Asset classes and asset allocation ranges

• Australian equities 90-100%

• Cash 0-10%

The Trust aims to be fully invested at all times, with cash exposure not exceeding the limit for any length of time.

Stock selection process

Perennial Value's investment process begins with screening approximately 400 stocks. Stocks are eliminated based on factors such as expensive P/Es, high debt and lack of earnings track record. Detailed modelling and research is then conducted on approximately 250 stocks.

To qualify for investment, stocks must have sustainable businesses (qualitative) and offer good value at the current share price (quantitative). Every potential investment opportunity is assessed on its key qualitative and quantitative criteria.

These criteria include:

• Sound financial position (low debt)

• Good management

• Demonstrable profit track record

• Strong market positions.

Direct company and industry contacts are an integral part of the stock selection process. Relative value is measured by Perennial Value's proprietary stock ranking model, known as the Perennial Value Screen. Having ratified the numbers in the company models, six key financial measures are downloaded from each company model into the Value Screen:

• Price to earnings

• Price to free cash

• Gross dividend yield

• Price to net tangible assets

• Net interest cover (to measure financial strength)

• Earnings growth.

For each of the six measures, stocks are assigned a ranking, with each measure evenly weighted. Each stock is then assigned a weighted average final score, which determines the final ranking. The outcome of this detailed research process is a list of stocks that are eligible for portfolio inclusion. The next phase of Perennial Value's process is portfolio construction.

The major driver of portfolio construction is Perennial Value's desire to deliver a true to label value portfolio at all times. This means that the portfolio has a strong bias towards the best ranking, or best value, stocks in the Value Screen.

Minimum market capitalisation

$50 million

Maximum/minimum  investment in any one stock (versus benchmark weight)

+/-5%

Listed ex-benchmark stocks permitted?

Yes

Maximum/minimum investment per GICS sector relative to benchmark

+/-20%

Tracking error range ex-ante (soft)

3 to 5%