Information Guide 13 International Securities

Transcription

1 Information Guide 13 International Securities netwealth Superannuation Master Fund 31 January 2014 This Information Guide is taken to be included in the Product Disclosure Statements for netwealth Super Wrap dated 31 January 2014 and for netwealth Super Accelerator dated 31 January It has been prepared and issued by netwealth Investments Limited (ABN ) ( netwealth ), AFS Licence No as trustee of the netwealth Superannuation Master Fund (ABN ) (the Fund ). Introduction to securities netwealth makes certain approved investments ( securities) listed on certain approved stock exchanges ( stock exchanges) available to investors in the netwealth Superannuation Master Fund through Super Accelerator Plus. International securities cannot be purchased through a netwealth Super Accelerator Core account. When you choose to invest in securities through the Fund, you agree to the terms and conditions as set out in this Information Guide applying to any transactions you conduct in securities and to any securities you hold as a result of such transactions Use of approved stockbroker All trades must be conducted by a stockbroker approved by netwealth (approved stockbroker). Details of approved stockbrokers can be obtained from your adviser or from netwealth upon request. If you wish to use a stockbroker who has not already been approved by netwealth for this purpose, you must seek such approval. netwealth will require a reasonable time to consider the application and we reserve absolute discretion in deciding whether to approve a stockbroker. Online trading of securities listed on stock exchanges is not available through Super Accelerator Plus. Fees and costs In addition to administration fees and costs, the fees payable to netwealth for buying, selling and holding securities listed on stock exchanges are set out below: (a) securities administration fee; Where you invest in securities listed on an stock exchange through Super Accelerator Plus a fee of 0.15% p.a. of the value of the securities acquired will be charged to your account. This fee is calculated daily and deducted monthly from your cash account based on the Australian dollar value of those securities. (b) securities share settlement fee; When you purchase or sell securities listed on an stock exchange a fee of $50 for processing each trade will be charged to your account. This fee is deducted at the time of the trade and is paid to us. If a share trade does not settle, any costs that we incur, associated with the failed trade, will be deducted from your cash account. You will also pay brokerage to your approved stockbroker as agreed between you and the approved stockbroker. This amount will be included in the buy or sell contract note and will be deducted from your cash account at settlement. Example of annual fees and costs These tables give an example of how fees and costs can affect your investment over a 1 year period where you have invested in securities listed on stock exchanges. Super Wrap This table illustrates the cost of investing in securities in netwealth Super Wrap. EXAMPLE International securities in Super Wrap Investment fees Administration fees Indirect costs for shares EQUALS Cost of shares option 0.15% p.a. of your securities holdings Balance of $50,000 For every $49,500 you have in securities, you will be charged $ And, you will be charged % p.a. 1 $ in administration fees. 1.25% on the amount in the cash account. And indirect costs of $6.25 each year will be deducted from your investment 2. If your balance was $50,000 then for that year you would be charged fees of $ What it costs will depend on the fees you negotiate with netwealth or your financial adviser. 1. This is the rate for account balances between $0 and $100,000.

2 2 2. Where $500 is required to be maintained as the minimum cash requirement and $49,500 is invested in securities on an stock exchange. 3. Additional fees may apply: Member advice fee - if you have a financial adviser you may choose to pay member advice fees. Where you purchase securities an securities share settlement fee of $50 will apply to each trade and you will also pay the brokerage costs agreed with your approved stockbroker. For other incidental fees and transaction costs, see the section headed Fees and other costs in the Super Wrap PDS. Super Accelerator This table illustrates the cost of investing in securities in netwealth Super Accelerator. EXAMPLE International securities in Super Accelerator Plus Investment fees Administration fees Indirect costs for shares EQUALS Cost of shares option 0.15% p.a. of your securities holdings 0.59% p.a. 1 plus $175 p.a. 1.25% on the amount in the cash account. Balance of $50,000 For every $49,500 you have in securities you will be charged $ , And, you will be charged $ in administration fees. And indirect costs of $6.25 each year will be deducted from your investment 2. If your balance was $50,000 then for that year you would be charged fees of $ What it costs you will depend on the fees you negotiate with netwealth or your financial adviser. 1. This is the rate for account balances between $0 and $250, Where $500 is required to be maintained as the minimum cash requirement and $49,500 is invested in securities on an stock exchange. 3. Additional fees may apply: Member advice fee - if you have a financial adviser you may choose to pay member advice fees. Where you purchase securities an securities share settlement fee of $50 will apply to each trade and you will also pay the brokerage costs agreed with your approved stockbroker. For other incidental fees and transaction costs, see the section headed Fees and other costs in the Super Accelerator PDS. Approved stock exchanges and securities You can invest in approved securities on each of the stock exchanges that netwealth has approved. The stock exchanges that netwealth has approved will be displayed on our website The securities netwealth has approved for each stock exchange will also be displayed on our website We will review the approved securities at least quarterly. netwealth will consider requests to approve additional securities and/or stock exchanges. If you wish to purchase a security that has not been approved by netwealth but which is listed on an stock exchange that has been approved or you wish to purchase a security and neither the security nor the stock exchange has been approved by netwealth, please contact us. We reserve the right at any time, in our absolute discretion, to approve or withdraw our approval of any stock exchanges and/or securities Sub-Custodian All securities listed on approved stock exchanges are held by RBC Investor Services Trust (RBC) as sub-custodian for netwealth. netwealth has signed a sub-custodian agreement with RBC and netwealth pays the relevant fees to RBC under that agreement. Under the agreement RBC may use other sub-custodians for each country in which securities are purchased. Buying and selling securities listed on stock exchanges You or your adviser must initiate all trades through your approved stockbroker. You cannot instruct netwealth directly. All trades must comply with the terms and conditions set out in this Information Guide. It is your responsibility to ensure that you have sufficient available funds in your cash account to settle a purchase and that you have sufficient securities in your account to settle a sale. netwealth is not responsible for any failure to settle a trade and any expenses incurred associated with a failed trade will be charged to your cash account. Where a trade or an attempted trade does not comply with the terms and conditions set out in this Information Guide, you

3 3 release and discharge netwealth from any loss and damage, you agree that all costs and expenses may be deducted from your cash account and you agree to indemnify netwealth for all costs, liabilities and expenses. netwealth will settle purchases or sales based on contract notes delivered to netwealth by the approved stockbroker provided the transaction complies with the following requirements : Minimum trade amount There is a minimum trade amount of A$1,000. Purchases netwealth will: only settle purchase transactions where there is sufficient available cash in your cash account; upon receipt of trade details, reserve funds in your cash account sufficient to settle purchase transactions at the estimated cost; within one business day of receipt of a contract note direct RBC to settle the purchase transaction on the settlement date; and once the settlement is completed confirm the final cost into your account (the final cost may differ from the estimated cost due to changes in exchange rates). Sales netwealth will: only settle sell transactions where there are sufficient securities the subject of the sale transaction held in your account; within one business day of receipt of a contract note direct RBC to settle the sale transaction on the settlement date. Available funds Funds from sell transactions will be available to you only after RBC has settled the transaction and the proceeds are transferred into your cash account. Exchange rates The exchange rates used for any purchase, sale, income receipt, corporate action, or any other currency requirement in relation to securities are advised to netwealth by RBC. All transactions will be converted into Australian dollars at a rate determined by RBC as soon as practical after netwealth directs RBC to action the transaction or after RBC receives the funds. netwealth may initially estimate the exchange rate on certain transactions and will reflect the actual exchange rate used by RBC once this is confirmed. netwealth does not provide any facility to manage exchange rate exposure through products such as derivatives. No cash will be held in foreign currencies as all transactions are converted to Australian dollars at rates advised by RBC. Taxation Tax legislation in jurisdictions may vary significantly from that in Australia. You should seek your own tax advice if you are considering investing in securities in any overseas jurisdiction. The netwealth Superannuation Master Fund may be required to pay withholding tax on certain income received into your account. We will reflect any such tax in your account and where possible claim relevant foreign tax credits, which once confirmed, will be reflected in your account. To the extent to which it is available to netwealth through RBC, netwealth will offer tax reclaim services in relation to certain jurisdictions to seek to have withholding tax deducted at the reduced treaty rate for that jurisdiction. However, these services may be available on a reasonable basis only, and netwealth will not be responsible for securing the actual underlying tax relief with relevant tax authorities and has no liability to you for any failure or delay in obtaining any tax reclaim. Additional taxation information may be required in relation to holding securities in the United States of America (USA). For example, the USA has recently introduced the Foreign Account Tax Compliance Act (FATCA). FATCA requires institutions foreign to the USA who invest in the USA to disclose certain information about their account holders to the USA Internal Revenue Service or be subject to a 30% withholding tax on income and gross proceeds from the sale of financial assets in the USA. netwealth will endeavour to meet these requirements however we provide no assurances in this regard and investments in US securities held in the Fund may be subject to this 30% withholding tax. Dollar cost averaging (DCA) plan Dollar cost averaging as described in the relevant PDS cannot be used to invest in securities. Minimum cash requirement Securities listed on stock exchanges will not be sold down to top up your cash account as described in the relevant PDS unless there are no

4 4 other liquid investments available to top up your cash account. International securities cannot be nominated in your auto sell down profile. Corporate actions Corporate actions associated with any of your holdings in securities will be advised to you for your consideration in accordance with our procedures outlined in the Information Guide 3: Investments. You should note that, as RBC or another subcustodian will hold the securities in our name, as trustee of the Fund, you may not be eligible for certain benefits that arise from directly holding the securities. We may also be restricted in our ability to apply for the maximum benefits an individual may be able to receive on corporate actions such as rights issues and share purchase plans. Monitoring your investment International securities held for you will be shown in your online account and on statements in Australian dollars using information provided to us by RBC on the market price of the security and the exchange rate between the Australian dollar and the currency that the market price of the security is quoted in. This information may not be current and actual values may differ. Risks Generally the risks detailed in the relevant PDS are also applicable to securities. There are additional risks associated with holding securities. These include: (a) Sub-custodian risk. There is a risk that the sub custodian (or their appointed sub-sub custodians) may not provide services as agreed with us or as agreed between themselves. We seek to minimise this risk by having service standards in place with RBC. (b) Exchange rate risk. All transactions will be converted to Australian dollars and netwealth does not provide a facility to manage exchange rate exposure through products such as derivatives. Movement in exchange rates will therefore have an effect on the value of your investments when converted to Australian dollars. (c) Market volatility While all markets experience volatility, some overseas markets may be more volatile than the Australian market particularly when this is combined with exchange rate volatility. (d) Political, economic and social events While all markets are subject to political, economic and social events, some overseas markets are much more susceptible to these events than the Australian market. Furthermore, it may be more difficult for you to anticipate and appreciate the significance of these events. (e) Lack of liquidity Some overseas markets do not provide the same level of liquidity as Australian markets, which means that it may be harder to trade some securities in a timely manner at a fair market price. (f) Lack of transparency or quality of information Overseas markets are subject to different laws and market rules and some markets do not provide the same quality and timeliness of information. For example, it may not be necessary for an entity listed on an overseas exchange to meet the reporting standards required of an Australian listed entity. Also, the information may not be prepared in accordance with accounting standards or in English. (g) Different regulation and legal remedies Other countries have different systems of regulation and different legal remedies available for investors who suffer loss. These systems of regulation and legal remedies may not provide the same level of protection and/or redress as apply in Australia. (h) Different types of securities Securities listed on overseas exchanges often differ significantly in legal form from the securities listed on Australian exchanges. For example, it is common for depository receipts to be traded in lieu of the underlying security. The rights of the owner of these receipts differ from the rights of a holder of the underlying security. (i) Trading difficulty caused by time differences Due to time differences between Australia and other countries, trading on stock exchanges often occurs outside normal business hours in Australia. This means that it may not be possible for you or your advisers to react to market events in as timely

5 5 a manner as would be the case with Australian listed securities. (j) Currency controls and foreign investment restrictions Investing on overseas markets involves the risk of freezes on repatriation of sale proceeds and regulation of exchange rates at which sale proceeds are converted to Australian dollars, both of which can result in investors not being able to access the income or capital of their investments at all or at true market value. Enforcement of foreign investment restrictions can result in compulsory divestment or appropriation of assets held by foreign (to the county concerned) investors which can result in loss of all or part of the value of the investment You should consider all of the parts of the PDS that are relevant to you before making an investment decision. Restrictions on the level of securities that can be held in a netwealth Superannuation Master Fund account You can invest an overall maximum allocation of 50% of your portfolio in securities, with the maximum allocation to any one security being 10%. These restrictions are applied when you join and first invest, and also when you make additional investments. If these restrictions are exceeded, we may not settle the trade. General advice warning This Information Guide may contain general advice, which does not take into account your individual objectives, financial situation or needs. You should assess whether the advice is appropriate for you having regard to your objectives, financial situation and needs, and consult a financial adviser before making a decision about whether to invest in any product of the Fund. Important notice Personal Super, Employer Sponsored Super, Standard Income Stream, Transition to Retirement Income Stream and Term Allocated Pension form part of netwealth Super Wrap and netwealth Super Accelerator and are issued by netwealth as trustee of the netwealth Superannuation Master Fund, ABN , a complying superannuation fund. The Product Disclosure Statements (PDS) for these products (of which this Information Guide forms a part) are available from our web site ( or by calling us on Issuer/trustee details: netwealth Investments Limited Level 8/52 Collins Street Freecall MELBOURNE VIC 3000 Phone ABN Fax AFSL contact@netwealth.com.au Fund details: netwealth Superannuation Master Fund ABN