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GENERAL INFORMATION | MODELS | REPORTING | FEES AND CHARGES

GENERAL

1. What is an SMA?

The Market Matters Managed Accounts are established and offered within the registered managed investment scheme, known as the Separately Managed Accounts (SMA). Each investor has a separate ‘account’ to which their investments are allocated. An account can be constructed by using one or two of the available investment strategies (referred to as Model Portfolios), which are selected from the investment menu.

2. How is an SMA different to a Managed Fund?

SMAs provide investors with exposure to a professionally managed portfolio of stocks, other securities and funds – but unlike a pooled managed fund structure, beneficial ownership of the underlying stocks rests with the investor. SMAs also offer the potential for a better after-tax outcome, as the structure will generally allow for management of tax parcels. An SMA will also provide investors with full transparency over their security holdings, automated trading (often at very low costs), benefits from distributions and dividends, online reporting, and finally investments are able to be transferred in specie for portability and convenience.

3. How easy is it to close/sell down an SMA portfolio?

You can either sell it down by selling the stock and collecting the funds or by transferring the stock out to SRN or HIN. If you choose to sell, the proceeds are paid out to the account on file on T + 3. If you put the sell in prior to 9.30am it will be actioned that same business day, otherwise, it is actioned on the following business day. Transferring stock out will cost $29 per line of stock.

4. What is the legal structure of an SMA?

The Market Matters’ Model Portfolios sit within a Registered Managed Investment Scheme, which is operated by Praemium as the Responsible Entity. As the Responsible Entity, Praemium is responsible for managing the Scheme and ensuring compliance with the requirements of the Corporations Act.

5. How are the assets held?

HSBC is appointed as custodian overall domestic assets and J.P.Morgan Chase as custodian overall international asset holdings. Each investor’s cash, securities and any liabilities are segregated into a Separate Account and held separately on trust. Records of individual security holdings by each investor are retained within the SMA.

6. Is there a PDS?

Yes, the Market Matters Model Portfolios can be accessed through the Premium PDS.

7. How can I make an investment?

To Invest in the Market Matters SMA, click on the relevant application form:

  • Individual
  • SMSF
  • Company
  • Trust

Complete the application form and attach supporting documentation. Email to [email protected] or post to:

Market Matters Level 29,
Chifley Tower,
2 Chifley Square
Sydney 2000

Investors will receive an email confirmation for review and acknowledgement.

MODELS

8. What are the fees

All fees are outlined in the Product Disclosure Statement (PDS) available by clicking here. It’s important that you read the PDS before deciding whether or not to invest in the Market Matters SMA’s. The PDS makes reference to a number of fees, such as an Establishment Fee, Contribution Fee, Adviser Service Fee, Dealer Group Service Fee and a Research Fee. They have a maximum amount that can be charged on each. These fees are discretionary and could be charged by your financial adviser – if you have one, and they are recommending this product to you. These fees are not charged by the Market Matters SMA. The only fees charged by Market Matters is the investment fee & the performance fee, if applicable. More information is available on the SMA investment menu – click here.

Administration Fee:

  • First $250,000 0.37% pa
  • $250,001-$500,000 0.30% pa
  • $500,001-$1,000,000 0.20% pa
  • $1,000,001+ 0.00% pa

Investment Fee: 0.70% pa (includes GST)

  • Performance Fee: 10% of outperformance compared to the benchmark (subject to positive performance and a high-water mark). Further detail available in the PDS.
  • Other Fees; In-specie Transfer Fee and Transaction Fees as listed in the Fact Sheet.

9. Do I need an advisor?

The PDS states that a Nominated Representative (financial adviser) is required to invest in the SMA. If you already have an adviser, then you can apply through them, but if you don’t have an adviser and you don’t want one, we can arrange for a nominated representative for investment in the SMA. There is no adviser fee charged to do this.

10. How often do portfolios rebalance?

Portfolios are rebalanced on an “as needed” basis in response to changes in the risk and/or return outlook for investments within each portfolio. The Market Matters’ Model Portfolios are active in nature, while they can also hold high levels of cash during periods of market uncertainty.

11. Who is responsible for the management of each model and the investments made?

Market Matters has an internal investment committee consisting of Peter White and Peter Whyntie. Peter White’s experience in the financial industry spans over 23 years, including 17 years in providing professional financial advice to clients. Peter Whyntie is a recognised leader in the governance, risk management and compliance community. He is an active member of the Governance Institute of Australia and the GRC Institute. He is the Course Director of the Advanced Risk Management Module of the Governance Institute’s Governance Diploma. Model Management is outsourced to James Gerrish, Portfolio Manager at Shaw and Partners. James is a major shareholder and the Primary Contributor to Market Matters.

12. Is there a cash element to an SMA?

In order to meet overall liquidity requirements, each Model Portfolio retains a minimum 2% cash component. It is intended that minimum cash levels are held at the portfolio level, but the structure allows higher cash levels to be held should the model manager deem appropriate.

REPORTING

13. What SMA reporting will I receive?

Investors in the Market Matters SMAs can view holdings online through the Praemium Investor Portal. This allows viewing of portfolio valuation and performance, model weights, as well as documents such as annual reports. Each year you will receive two PDF reports, which will be loaded onto the Praemium investor portal. A portfolio valuation, performance and expenses report (available in August) and a full tax report; tax summary, realised gains/losses, income and expenses etc (available in early October, after the various tax components on all securities in the Scheme have been updated). In addition to the full Praemium reporting, the Market Matters Investment Team will produce monthly performance reports on each portfolio strategy. This will report on return performance, risk and the outlook of the portfolio.

14. Where do I find information on detailed model investment processes and what each model sets out to achieve?

Information can be found on the Market Matters website www.marketmatters.com.au/sma and the Praemium website www.praemium.com.au.

FEES AND CHARGES

15. What fees are charged?

An investment management fee of 0.70% inclusive of GST and a portfolio performance fee of 10% for outperformance above the relevant benchmark are applied.

16. Are there any transaction/trading costs associated with SMAs?

Yes, but due to the structure of the scheme they are generally minimal as trades across all models in the scheme are netted daily and executed at 0.05%. The brokerage charge is a maximum of 5bps.

17. Are there any additional admin costs to the client?

The Praemium platform fee is the only other additional fee, other than the fees already outlined above. Praemium’s fee is tiered and set out in the PDS.