Benefits of investing in MIR

• There are many small and medium size companies listed on the ASX covering a very diverse range of industries and market sectors. Mirrabooka seeks to invest in those companies which offer investors attractive medium to long term value. Of particular interest are companies with relatively low price earnings ratios and high dividend yields. Often these companies have strong growth prospects and specialise in a range of attractive product, market and industry sectors. Benefits may also arise from takeover and/or merger activity. 

• Investing in this sector can be subject to greater volatility compared with investing in larger capitalised companies because of the reliance these smaller companies have on single markets, products and/or key individuals. From time to time, shares in these smaller companies may also be subject to lower than normal liquidity. Consequently, this section of the market requires a significant amount of research and subsequent close monitoring of the portfolio. 

• In this context, Mirrabooka is willing to move quickly to realise investments when we form a view for risk management purposes that an investment is well overvalued or there has been a material adverse change in a company's circumstances or prospects. As such, we believe it is important to be nimble and responsive to material changes affecting these investments. 

• Mirrabooka typically holds between 50 to 80 stocks depending on their fit with our investment aims and the desired concentration of risk within the portfolio.

• Mirrabooka is able to offer investors an actively managed portfolio of small to mid cap companies with low managements fees relative to similar funds which focus on this area of the Australian market - 0.60% for the financial year to 30 June 2018.

About the Fund

Mirrabooka is a listed investment company specialising in investing in small and medium-sized companies located within Australia and New Zealand. Our general definition of small and medium-sized companies is those companies which fall outside the S&P/ASX 50 Leaders Index.

The Company aims to provide medium to long-term investment gains through holding core investments in selected small and medium-sized companies and to provide attractive dividend returns to shareholders from these investments.

Shareholders have immediate access to:

• A well-diversified portfolio of small to mid-cap companies; and

• A Board and Investment Committee with extensive investment skills and practical business experience. 

• A fund with no upfront fees or commissions to third parties - transaction costs will be borne when buying and selling Mirrabooka shares through a stockbroker. 

• Low managements fees relative to similar funds which focus on the small to mid-cap area of the stock market - 0.62% for the financial year to 30 June 2017

• Effective capital management.

• Simplified taxation structure for shareholders, because Mirrabooka as a separate legal entity pays tax just like any other company, however the tax is small because companies receiving fully franked dividends do not need to pay any additional tax on the franked dividend. These fully franked dividends are passed straight through to shareholders in February and August of each year. Certain Australian shareholders can also claim a tax benefit where the dividend is sourced from a LIC capital gain: Unit trusts on the other hand typically have many components of income in their distributions like fully franked dividends, concessional capital gains tax, short-term capital gains, tax deferred components. All of which add to the complexity to unit holders tax returns.

• An active approach to keeping shareholders informed about the Company's activities and performance, including yearly and half yearly profit announcements and access to all company announcements, including net tangible asset announcements.

How we invest your money

There are many small and medium size companies listed on the ASX covering a very diverse range of industries and market sectors. Investing in this sector can be subject to greater volatility compared with investing in larger capitalised companies because of the reliance these smaller companies have on single markets, products and/or key individuals. From time to time, shares in these smaller companies may also be subject to lower than normal liquidity.

Mirrabooka's investment team is continually reviewing the portfolio, meeting with company management and researching current and potential holdings. The investment process also includes input from stockbroker analysts who specialise in particular companies/sectors of the market as well as from selected industry experts.

As this section of the market requires a significant amount of research and subsequent close monitoring of the portfolio Mirrabooka is willing to move quickly to realise investments when we form a view for risk management purposes that an investment is well overvalued or there has been a material adverse change in a company's circumstances or prospects. As such, we believe it is important to be nimble and responsive to material changes affecting these investments. 

Mirrabooka holds a well-diversified portfolio typically between 50 to 80 stocks depending on their fit with our investment aims and the desired concentration of risk within the portfolio.

Approach to Managing the Portfolio

• Ensure top 20 holdings do not dominate the portfolio

• Take small starting positions and add when there is increased conviction, particularly through any price weakness

• Sell when there is an adverse change from original investment case

• Reduce when valuations become overstretched

• Better management of capital gains and losses through diversification