Benefits of investing in the Yarra Enhanced Income Fund

A summary of the significant features and benefits of investing in the Fund is as follows:

• Professional management: Access to a specialist team, with extensive experience in fixed income and hybrid (debt/ equity) investments, who actively manage the underlying investments.

• Extensive resources: Comfort that our credit team analyses and assesses the credit worthiness of all investments.

• Access to investment opportunities: By investing in a managed fund you effectively pool your money with that of other investors. This means you can take advantage of the greater buying power and investment opportunities a large pool of money allows, even though you may have a comparatively small sum of money to invest.

• Diversification: Exposure to a professionally managed portfolio diversified by security type, credit risk, industry and issuer. The underlying investments are actively managed to seek optimal risk/reward outcomes for the Fund.

• Liquidity: The ability to generally invest in and redeem Units in the Fund on a daily basis.

Risk level

Moderate to High

Investor suitability

The Fund may be suitable to investors that have a medium term investment time frame (i.e. a recommended minimum term of 3 to 5 years), who seek returns that are in line with the objective of the Fund and who have a risk tolerance in line with the Funds summary risk level.

This product is intended for use as a minor allocation for a consumer who is seeking income distribution, capital growth, capital preservation and has a medium risk and return profile for that portion of their investment portfolio. It is likely to be consistent with the financial situation and needs of a consumer with a 3 to 5 year investment timeframe and who is unlikely to need to withdraw their money on less than 10 business days’ notice.

About the Fund

The Yarra Enhanced Income Fund seeks to deliver higher returns to investors than traditional cash management and fixed income investments.

The Fund offers investors access to typically 40 - 50 securities and can provide diversification to traditional asset classes.

Income distributions are paid quarterly and may be partially franked. Some securities held by the Fund may have tax-deferred features so that part of the distributions paid by the Fund may be tax-deferred.

The underlying investments are actively managed to achieve optimal risk/reward outcomes of the Fund.

On average, assets within the Fund have an Investment Grade Rating.

Investment approach

The approach is research-driven, utilising the comprehensive research process of Yarra Capital Management and taking into account the broad economic and market environment as well as specific investments details.

Investment objective

To earn higher returns than traditional cash management and fixed income investments (over the medium-to-long term) through exposure to a diversified portfolio of hybrid (debt/equity) and fixed income securities. The Fund is expected to produce less volatile returns than are inherent in equity markets, while offering modest capital growth and some franking credits.

How we invest your money

The Fund invests in a range of high yielding fixed income and hybrid securities through its investment in the Enhanced Income Pooled Fund. The assets which the Fund will be exposed to include:

• Floating rate notes

• Convertible/converting securities

• Corporate bonds

• Government and semi-government securities

• Structured/subordinated debt

• Perpetual (non call) step-up preference securities

• Cash

• High yielding fixed income securities

The underlying assets are predominantly Australian, may be quoted or unquoted, issued by listed or unlisted issuers, denominated in Australian dollars or foreign currencies and acquired in the primary or secondary markets.

Derivatives may be used to manage investment risk and gain or reduce exposure to relevant markets in an efficient manner whilst still remaining within allowable asset allocation ranges.