Benefits of investing in the Spheria Australian Microcap Fund

Investing in the Fund offers investors a range of benefits:

• Focus on quality businesses and active investment management - Spheria is a fundamental based investment manager with a bottom-up focus.
  
• Team experience - the investment team of Spheria has over 40 years' experience investing in equities.
  
• Potential for higher growth - microcap companies generally have more potential for growth relative to large companies as they may be in the early stages of development or are providing new services or technologies.
  
• Open-minded, holistic thinking - Spheria assesses stocks with a broader view, noting that global parallels are important in a technologically evolving environment.
  
• Risk aware - risk is central to Spheria's thinking around portfolio construction and investment not merely an after-thought.
  

Risk level

High

This means there is a high risk of losing money in any year. Conversely, the Fund is likely to produce higher returns over the long term.

Investor suitability

Investors should be comfortable with some volatility and the possibility of negative returns.

About the fund

The Fund is an actively managed portfolio, investing in a broad range of microcap companies predominantly from Australia with the objective of specifically seeking out securities where the present value of future free cash flows can be reasonably ascertained and the security is trading at discount to its intrinsic value, subject to certain risk criteria.

Key features

The objective of the Fund is to outperform the S&P/ASX Small Ordinaries Accumulation Index over the medium to long term by investing predominantly in listed companies which are outside the top 250 ASX listed companies by market capitalisation and companies listed on the New Zealand Stock Exchange with an equivalent market capitalisation.

How we invest your money

Asset allocation

(Asset class: range)

• Australian equities*: 80-100%

• New Zealand equities*: 0-10%

• Cash: 0-20%

* Individual asset holdings are limited to 10% of the Fund's NAV. The Investment Manager may use exchange traded derivatives for hedging purposes as part of its investment strategy subject to the underlying effective face value being limited to 10% of the NAV of the Fund. The Fund may also use derivatives to manage currency risks.

Derivatives

The Fund will not use derivatives for gearing purposes.

Borrowings

Whilst the Fund is not restricted in its borrowing levels, the Responsible Entity does not intend to borrow on behalf of the Fund.