This price includes the buy spread but excludes contribution fees
This price includes the sell spread
Smallco Broadcap Fund (SBF)
SBF is a concentrated Australian Equities fund that provides a broader exposure to the Australian equity market than SIF.
The target return for SBF is 5% pa above the S&P/ASX 300 Accumulation Index after fees on a rolling 3 year basis. Since inception in July 2008 SBF has comfortably exceeded this target.
Smallco manages SBF in a style neutral manner, employing a mix of both bottom up and top down analysis with a strong focus on earnings direction and risks.
Smallco aims to deliver good medium term returns in SBF through overlaying a substantial core of reasonably priced quality long term growth stocks with, when they can be found, attractive value ideas where we believe a re-rating trigger is likely within 6-12 months. The re-rating trigger is crucial as SBF does not invest in “cheap” stocks just because they appear to be “value”.
We are strong believers that earnings are the key driver of share prices and that more accurate forecasting of earnings will drive greater and more consistent outperformance.
Focus is placed on identifying stocks through fundamental analysis which are likely to exceed consensus earnings expectations or stocks which are out of favour and we are confident will at least meet earnings expectations.
SBF can invest up to 40% in companies with a market capitalisation of less than $1bn and will genuinely deviate significantly from the index when appropriate opportunities are found. Stock weightings are determined by our assessment of the quality of the stock, the likely investment outcome and risk of a sustained capital loss. This is not another concentrated fund whose top 10 holdings are drawn almost entirely from the ASX 20 or 50.
Important Notice Regarding Smallco Broadcap Fund - out of cycle distribution
Smallco aims to achieve high compound returns in the Smallco Broadcap Fund (Fund) by investing in the stock market. We believe that it is easier to achieve this aim through maintaining flexibility to manage the Fund’s exposure in smaller companies by limiting the size of the Fund. To this end, Smallco started limiting applications for units in the Fund effective 1 March 2016.
Since this date and despite now being hard closed the size of the Fund has continued to increase. We feel it is now prudent to make an out of cycle distribution payment to all unit holders in the Fund effective 31 December 2017 in order to immediately reduce the Fund’s size and to assist us to continue to meet the Fund’s investment objectives.
We emphasise that this is an out of cycle distribution. In the future, it is our intention to continue to make distributions annually on the 30th of June. Please note that the 30 June 2018 distribution’s size and tax treatment will take into consideration this distribution.
Unitholders will not be able to reinvest this 31 December 2017 out of cycle distribution.
The distribution reinvestment policy for the standard 30 June distribution will continue (distributions are automatically reinvested in the Fund for investors who have selected reinvestment on 30 June each year).
The distribution will be paid to investors that hold units on the last business day for 2017 (the 29th of December 2017). The anticipated size of the 31 December 2017 out of cycle distribution is 20c per unit (representing slightly less than 10% of the net asset value of the Fund based on the unit price at the date of this letter). The final payment may vary up or down should there be a material movement in the Fund’s size between now and 29 December 2017.
The tax components of this distribution will not be known until 30 June 2018 when the full financial year distribution is calculated. Investors will be informed of the tax makeup of the 2018 financial year distributions, inclusive of this out of cycle distribution, by mid-July 2018 per the usual end of year reporting timetable.