The benefits of ETFs generally include:

Diversification: Through holding a single ETF security, investors can have exposure to a diversified portfolio of securities. Thismeans investors are less exposed to theperformance fluctuations of individual securities; and

Liquidity: An ETF enables investors to trade on the ASX any time during market hours. This flexibility provides an efficient wayto implement asset allocation changes to a portfolio.

The benefits of Active ETFs include:

Being an ETF: An Active ETF features the same benefits as ETFs (as described above); and

Active management: An Active ETF provides access to active investment management capabilities, aimed at outperforming abenchmark and seeking to minimise losses during market downturn instead of passively following the benchmark.

The Fund is an Active ETF. The Fund is a feeder fund into an existing unlisted registered managed investment scheme, the
Morningstar International Shares (Hedged) Fund, which is also managed and operated by Morningstar. The Fund invests primarily in the Underlying Fund but may also hold cash and/or derivatives to gain desired exposuresor manage risks. Morningstar actively manages the portfolio construction of the Fund and the Underlying Fund.

A complement to your existing investment portfolio.

International shares may provide many benefits to your broader investment portfolio. You gain access to opportunities not readily available in Australia. And this could mean smoother and more consistent returns achieved from diversification across geography and industry. We’ve hedged the portfolio for our investors to minimise the potential impact of currency volatility.

• A smoother journey to achieving your financial goals achieved by a focus on quality and value.
• Today’s opportunities actively managed to invest in where we believe the most compelling opportunities are at any given time.
• Total transparency full underlying portfolio holdings updated every business day.

The Fund is designed for Australian investors who seek the potential forcapital growth over the long term and geographic diversification, while minimising the risk of permanent capital loss, by providing exposure to listed international shares

Morningstar

Morningstar is a leading provider of investment management, asset allocation, portfolio construction and investment research services with over 35 years’ experience in the United States, Australia and other international markets. Morningstar advises on, and manages funds for superannuation funds, institutions, platform distributors, financial advisers and individuals.

Morningstar’s disciplined investment approach delivers objective, cost-effective and holistic solutions for our clients – helping them reach their financial goals. This long-term, valuation-driven approach is underpinned by an emphasis on preserving capital and undertaking fundamental analysis of global asset classes and securities.

Morningstar’s investment professionals share an international perspective that is informed by local market knowledge and guided by
consistent global principles to craft investment solutions that cater to the unique needs of their markets. The Fund is an Active ETF.

Investment universe 

The Underlying Fund will generally gain exposure to shares listed on recognised stock exchanges, preferred shares or other securities of an equity nature, shares received from a corporate action, ETFs with an objective to replicate the Benchmark or part thereof, cash and cash equivalents invested in money market or fixed interest securities and managed funds that invest in these securities.

• The Fund provides exposure to an investment strategy managed by investment professionals with considerable experience in investment management, global investing, portfolio construction and investment research. These core capabilities are built on a foundation of proprietary methodologies and award-winning research;
• The Fund provides investors with efficient access and exposure to diversification across multiple investments from around the world in a single investment;
• Units in the Fund can be easily bought and sold just like any securities listed on the ASX, without the need to directly trade individual securities on international exchanges; and
• The Fund provides a global investment solution for different types of investors, including those who want to build their own customised portfolio to complement their existing local investments. 

The Fund will invest predominantly in units of the Morningstar International Shares (Hedged) Fund (ARSN 092 227 435) (“Underlying Fund”) and some cash. The Fund may also invest in derivatives to gain desired exposures or manage risks. 

In turn, the Fund aims to produce superior long-term returns relative to the Benchmark. The Underlying Fund consists of a well-diversified portfolio of companies that exhibit desirable fundamental quality and/or value characteristics.

In taking this active approach, the Underlying Fund consist of a well-diversified portfolio of companies that exhibit desirable fundamental quality and/or value characteristics, supplemented by a passive currency overlay. By fundamental quality, we refer to characteristics like low debt levels, sustainable earnings, and growing cashflows. And by value characteristics, we refer to investments that are currently overlooked or underappreciated by other investors. Together, we believe that international companies that are of high fundamental quality, bought at attractive prices, results in a portfolio that is typically more resilient in times of market uncertainty.

Investment exclusions
As part of Morningstar’s screening process whereby we may actively exclude certain securities or sectors based on environmental, social or governance factors

Asset Allocation