DDH Preferred Income Fund

About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/101216-2022-03-09-17:14.pdf
ASX Code
INVESTMENT STYLE The Fund is a portfolio of fixed income securities.
INVESTMENT PROFILE The Fund seeks to provide a higher yield than traditional cash management and fixed income investments in all market conditions.
FEES 0.82% p.a.



Benefits of investing in the DDH Preferred Income Fund

The Fund, which is part of the DDH Investment Access Funds suite of Funds, offers you a range of benefits and features including:

Potential for capital growth and income to meet your investment needs.

Investor flexibility as the Fund is open to both direct investors and indirect investors who wish to invest in the Fund via a master trust or a wrap service (i.e. a Service Operator).

Online account access is available for direct investors, which allows you to view account balances, recent transaction and distribution details. Indirect investors should make contact with their Service Operator.

Online resources including information and reports on topics such as performance history, asset allocations, unit prices, fund and market commentaries and updates as well as access to the necessary brochures and forms.

Ability to keep track of investments for direct investors by providing:

  • Distribution statements containing details of distributions
  • Transaction statements detailing your applications, withdrawals and balances (including unit prices)
  • Personalised annual taxation statements, providing all the relevant information you will need to complete your tax return
  • Upon request we will send you (free of charge) a copy of the audited financial reports of the Fund
  • Confirmation of your previous transactions and any other additional information about your investments by calling us on the number provided or via email at investments@ddhgraham.com.au.

Risk level





Key Features

About the Fund

The DDH Preferred Income Fund (Fund) is a unit trust designed to produce returns in excess of cash and traditional fixed income funds achieved by diversification across industry sectors and assets.  It aims to provide exposure to high yielding securities not included in traditional fixed income portfolios.

The Fund is a portfolio of fixed income securities, selected on a credit basis, diversified by asset type, industry exposure and style of interest rate distributions. The fund uses most traditional fixed income assets classes with an emphasis on ASX listed bonds and hybrids. No structured credit or leveraged securities are considered, apart from non-leveraged fixed income ETFs.

The Fund's investment strategy is to identify appropriate investments that are expected to generate a sufficiently high yield, commensurate with the assumed risk, with minimum volatility of returns.

The Fund consists of a core portfolio constructed with reference to macroeconomic factors and industry exposure. The balance of the fund is a tactical component that seeks to enhance returns via investing in short term yield opportunities in the same fixed interest asset classes but especially those traded on the ASX.

About DDH

DDH Graham Limited is an independently-owned Queensland-based funds management and administration organisation founded in 1981. DDH has considerable experience in trust management and administration. It is the responsible entity or fund manager for a number of financial asset funds and property funds and operates money market products.


How we invest your money

The investment manager applies a disciplined and conservative approach to the task of optimising returns to investors. The portfolio manager has a universe of internally approved fixed interest securities from which to select the portfolio. Approval is initially granted for the issuing company based on credit analysis. Subsequently the structure of the individual interest rate security from that company is assessed in detail and approved for investment if appropriate. The pool of available securities is then constantly monitored in terms of yield provision as well as continuing to meet required credit standards.

From this pool of securities a core portfolio representing 70-80% of the fund's assets is constructed, selected with reference to:

  • Macroeconomic analysis, both economic and interest rate driven
  • Industry selection
  • Level of yield provision
  • Weighting guidelines

The core portfolio is then stress tested and adjusted to minimise interest rate and credit market exposure.

The remainder of the portfolio allows tactical positions to be taken in securities on the approved list with a view to:

  1. Capturing changes in credit view
  2. Identifying short term yield opportunities
  3. Adjusting the overall portfolio's interest rate sensitivity
  4. Capturing mispricing from liquidity constraints
  5. Maintaining the portfolio's capital value

The total portfolio is then re-assessed and monitored with reference to weighting guidelines and stress tests as described above.

The table below shows the Fund's portfolio construction asset class weights:

  • Australian Government and Semi Government Bonds (or ETFs representing): 0-50%
  • Investment grade Corporate Senior Bonds, subordinated Corporate Bonds and hybrids, each either OTC or ASX listed: 20-98%
  • Non-Investment grade Corporate Senior Bonds, subordinated Corporate Bonds and hybrids, each either OTC or ASX listed: 0-30%
  • Australian cash: 2-90%

Additionally individual weighting constraints limit the exposure to one security at 10% of the Fund's assets and 15% for exposure to one company (if rated investment grade) or 10% to one company if the company is not rated investment grade. Industry constraints limit exposure to one industry at 30% unless the company is APRA regulated, where the industry constraint is 50%.