Templeton Global Equity Fund

Transcription

1 Date: 12 May 2014 (ARSN ) Product Disclosure Statement Franklin Templeton Investments Australia Limited (ABN , AFS Licence Number ) Contacting us: If you have any questions or would like more information: Telephone: This Product Disclosure Statement (PDS) is a summary of significant information and contains a number of references to important information (each of which forms part of the PDS). You should consider that information before making a decision about the. The information provided in the PDS is general information only and does not take into account your personal financial situation or needs. You should obtain financial advice tailored to your personal circumstances. The offer to which this PDS relates is available only to persons receiving the PDS (electronically or otherwise) in Australia or New Zealand. If you are in possession of this PDS outside Australia or New Zealand, you should seek advice regarding restrictions on investing. Investors receiving this PDS in New Zealand should read the separate Important Information for New Zealand Investors booklet. This PDS was prepared in accordance with Subdivision 4.2C of Division 4 of Part 7.9 of the Corporations Regulations Capitalised terms used in this PDS and not otherwise defined are defined in Section 9 under the heading Other Information. The information in this PDS is up to date at the time of preparation. However, information relating to the Fund that is not materially adverse information is subject to change from time to time. We may update this information. For updated information about the Fund (such as performance) please consult your financial planner, call our Client Services team on or visit our website We will provide you with a paper copy of any updated information without charge upon request. If there is a change in information which we consider is materially adverse we will generally issue a new PDS.

2 TABLE OF CONTENTS 1. ABOUT FRANKLIN TEMPLETON INVESTMENTS AUSTRALIA LIMITED 2 2. HOW THE TEMPLETON GLOBAL EQUITY FUND WORKS 2 3. BENEFITS OF INVESTING IN THE TEMPLETON GLOBAL EQUITY FUND 4 4. RISKS OF MANAGED INVESTMENT SCHEMES 4 5. HOW WE INVEST YOUR MONEY 5 6. FEES AND COSTS 6 7. HOW MANAGED INVESTMENT SCHEMES ARE TAXED 7 8. HOW TO APPLY 7 9. OTHER INFORMATION 8 1. About Franklin Templeton Investments Australia Limited Responsible Entity Franklin Templeton Investments Australia Limited ( Responsible Entity, we or us ) is the responsible entity of the ( Fund ). We are solely responsible for the management of the Fund. The management of the Fund includes the day-to-day administration of the Fund and making investment decisions in relation to the Fund. The Responsible Entity is required to ensure that the Fund is operated in accordance with the Constitution and with the provisions of the Corporations Act. The Responsible Entity may, from time to time, appoint a related entity or entities as investment manager to manage some or all of the investments of the Fund. We are indirectly wholly owned by Franklin Resources, Inc., a global investment management organisation, operating as Franklin Templeton Investments, which is headquartered in California. Franklin Resources, Inc. provides, through its subsidiaries, a wide selection of investment products and styles under the Franklin Equity Group, Franklin Templeton Fixed Income, Templeton, Franklin Templeton Real Asset Advisors, Balanced Equity, Darby and Mutual Series investment platforms. The common stock of Franklin Resources, Inc. is listed on the New York Stock Exchange (and is included in the Standard & Poor s 500 Index). 2. How the works About the Fund and structure The Fund is a registered managed investment scheme that is an unlisted Australian unit trust. The Fund comprises assets which are acquired by the Responsible Entity in accordance with the investment strategy for the Fund. The Fund is governed by the Constitution. An investor s interest in the Fund is represented by Units. A Unit holder has an interest in the assets of the Fund as a whole, subject to the liabilities of the Fund. A Unit holder does not have an interest in any particular asset of the Fund. Investors can acquire interests in the Fund by applying for Units and can withdraw from the Fund by making a withdrawal request in relation to the Units they hold. The price at which Units are acquired ( Application Price ) is determined in accordance with the Constitution. The Application Price on a Business Day is, in general terms, equal to the product of the Net Asset Value divided by the number of Units on issue and adjusted up for transaction costs (called the buy spread ). The Application Price is generally determined each Business Day. The price at which Units are withdrawn ( Withdrawal Price ) is determined in accordance with the Constitution. The Withdrawal Price on a Business Day is, in general terms, equal to the product of the Net Asset Value divided by the number of Units on issue and adjusted down for transaction costs (called the sell spread ). The Withdrawal Price is generally determined each Business Day. The Application Price and the Withdrawal Price will increase as the market value of the assets of the Fund increases and will decrease as the market value of the assets of the Fund decreases. The terms and conditions of the Constitution are binding on each Unit holder (and all persons claiming through them). Product Disclosure Statement Page 2 of 8

3 How do you invest in the Fund? How do you withdraw from the Fund? Buy/sell spread estimate Minimum investment Valuation of Fund assets Unit pricing Distribution frequency Distribution payment methods Transfers Unit pricing policy Investors can invest, or increase their investment, in the Fund by acquiring Units. An investor can acquire Units by making an application for Units. An application for Units is made by submitting an application form to the Responsible Entity. To invest in the Fund you will need to complete the application form which accompanies this PDS. The application form is also available from our website or by contacting our Client Service team on If you are investing through an IDPS Service or an IDPS-like registered scheme you will need to complete the application form provided by the relevant operator. The information provided in the application form must enable the Responsible Entity to satisfy its Anti-Money Laundering / Counter-Terrorism Financing (AML/CTF) compliance and monitoring programs prior to the Responsible Entity issuing Units. Further information about this requirement is available in the application form accompanying this PDS. Application forms and relevant identification documents need to be received by Link Market Services Limited ( Registrar ) and appropriate funding provided to the Fund s nominated bank account by 12 noon on a Business Day to receive the Application Price for that Business Day. Unit holders can decrease their investment in the Fund by disposing of Units. A Unit holder can dispose of Units by making a withdrawal from the Fund. A withdrawal is made by lodging a withdrawal request with the Responsible Entity. Withdrawal requests need to be received by the Registrar by 12 noon on a Business Day to receive the Withdrawal Price for that Business Day. A withdrawal will usually be satisfied within 10 Business Days. In some circumstances, such as suspension of trading on the Australian Securities Exchange, or a foreign securities exchange or non-compliance with AML/CTF requirements, Unit holders may not be able to withdraw their investment in the Fund within 10 Business Days. If the Fund becomes illiquid, for the purposes of the Corporations Act, then you may only withdraw from the Fund in accordance with the terms of a withdrawal offer (if any) made by the Responsible Entity in accordance with the Corporations Act. There is no obligation on the Responsible Entity to make a withdrawal offer. The Responsible Entity anticipates that the Fund will generally be liquid. We generally require a balance of $10,000 to keep your investment open. 0.20% buy spread/0.20% sell spread. The Buy/Sell Spread is an estimate of the transaction costs that are incurred in buying and selling the underlying assets of the Fund as a result of applications and redemptions. We reserve the right to amend the Buy/Sell Spread at our discretion and without prior notice. Unless otherwise determined by us, the minimum initial investment is $25,000. The minimum additional investment amount is $5,000 and the minimum account balance is $10,000. We may accept a minimum investment amount of less than $25,000 at our discretion. We may also accept a minimum additional investment amount of less than $5,000 at our discretion. The Fund s assets are usually valued each Business Day. Unit prices are usually calculated each Business Day. Distributions are made quarterly as at 31 March, 30 June, 30 September and 31 December in accordance with the Constitution. A Unit holder s distribution for a distribution period will be a proportion of the distributable income for the Fund which is determined by reference to the proportion of the Units held by the Unit holder (as at the end of the relevant three month period). Distributions will be reinvested into further Units unless otherwise directed by you. Unit holders may transfer Units, subject to the procedure set out in the Constitution and the Corporations Act. We may refuse to record a transfer of a Unit for any reason including if, in our opinion, it is not in the best interests of the Fund to do so. We have established a formal written policy in relation to the guidelines and any relevant factors that are taken into account when exercising any discretion in calculating Unit prices (including determining the value of assets and the amount of liabilities). A copy of our policy will be made available to investors on request free of charge. Product Disclosure Statement Page 3 of 8

4 Disclosure At the date of this PDS, W class Units were enhanced disclosure securities. As enhanced disclosure securities: as a disclosing entity, the Fund will be subject to regular reporting and disclosure obligations and copies of documents lodged with ASIC in relation to the Fund can be obtained from, or inspected at, an ASIC office; and you have the right to obtain a copy of the following documents: - the annual financial report most recently lodged with ASIC by the Fund; - any half-year financial report lodged with ASIC by the Fund after the lodgement of that annual financial report and before the date of this PDS; and - any continuous disclosure notices given by the Fund after the lodgement of that annual financial report and before the date of this PDS. 3. Benefits of investing in the Significant features The Fund will hold units in the Templeton Global Trust Fund which in turn will invest in a portfolio of equity securities in accordance with the Templeton investment process. The Templeton investment process endeavours to identify undervalued equity securities through fundamental company analysis, using a global industry focus and a long-term investment horizon. The Templeton investment process reflects our belief that, over time, well-chosen undervalued securities will be recognised by the market and will reward the patient investor. The Franklin Templeton Investments global research network, with investment professionals located around the world, performs extensive fundamental company analysis and industry analysis seeking to uncover investment opportunities. Significant benefits The significant benefits of the Fund are: exposure to the Templeton Global Trust Fund, which has a portfolio that is developed using detailed, bottom-up fundamental valuations that seeks to identify long-term investment value; investment in a professionally managed fund with an underlying investment in a diversified global equity securities portfolio across sectors; and exposure to Templeton s proven ability to consistently adhere to a disciplined investment process for more than 60 years. 4. Risks of managed investment schemes You should note: all investments carry risk; different strategies may carry different levels of risk depending on the assets that make up the strategy; assets with the highest long-term returns may also carry the highest level of short-term risk; the value of investments will vary; the level of returns will vary and future returns may differ from past returns; and returns are not guaranteed and you may lose some of your money. The laws affecting registered managed investment schemes may change in the future. The level of risk for you will vary depending on a range of factors, including age, investment timeframes, where other parts of your wealth are invested and your risk tolerance. The significant risks of investing in the Fund include: Market risk This is the risk that the performance of the global investment markets as a whole may impact on the Fund s investment returns. Some of the factors that influence the markets include world economic activity, global interest rates, investor sentiment and world events. Emerging markets risk The risk related to investing in countries that have less developed political, economic, legal and regulatory systems. Investments in emerging markets may be impacted by factors such as political/economic instability, lack of liquidity or transparency or safekeeping issues. Product Disclosure Statement Page 4 of 8

5 Currency risk The risk of loss arising from exchange-rate fluctuations or due to foreign exchange control regulations. For New Zealand investors, the offer may involve additional currency exchange risk. The currency for the securities is not New Zealand dollars. The value of the securities will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant. If you expect the securities to pay any amounts in a currency that is not in New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand in New Zealand dollars. Liquidity risk The risk that arises when adverse market conditions affect the ability to sell assets when necessary. Reduced liquidity may have a negative impact on the price of the assets. Fund risk There are risks of investing in the Fund rather than investing directly in securities. Risks include, but are not limited to, the risk that: the Fund terminates; the fees and expenses may increase; investments and withdrawals by one or more Unit holders may have an impact on other Unit holders; or there is a change in the Responsible Entity. An investment in the Fund is not an investment in, deposit with or any other liability of the Responsible Entity or any other entity in the Franklin Templeton Group. It is subject to risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. The Responsible Entity and its related entities do not guarantee the performance of, or any income distribution from, the Fund. 5. How we invest your money Warning: you should consider the likely investment return, the risk, and your investment timeframe when choosing whether to invest in the Fund. What is the Fund s investment objective? What does the Fund invest in? Minimum suggested timeframe for investment What is the suggested investor profile? Do we undertake currency management for the Fund? Risk level Changing the investment objective Statement regarding labour standards and environmental, social and ethical considerations Switching The investment objective of the Fund is to outperform the MSCI All Country World Free ex Australia Index, in Australian dollar terms, over the medium to long term after fees and expenses (but before taxes). The Fund invests in the Templeton Global Trust Fund ( TGTF ), which is a registered scheme for wholesale clients (as defined in the Corporations Act). TGTF is managed by us and invests in equity securities considered undervalued based on fundamental company analysis using a global industry focus (refer earlier comment) and a long-term investment horizon. At least five years. Investors who: have an investment timeframe of at least five years; wish to gain exposure to a diversified global equity securities portfolio; and are comfortable with the risk level of the Fund. No. The Responsible Entity considers that the risk level of the Fund to be high. The Responsible Entity is permitted to change the investment objective of the Fund. If the Responsible Entity proposes to change the investment objective of the Fund, the Responsible Entity will give at least 30 days notice of the proposed change to Unit holders. We generally do not take labour standards, and ethical, social or environmental considerations into account when making investment decisions in relation to the Fund. However, these factors may sometimes be implicitly taken into account when investment decisions are made. Switching is not available for this Fund. Product Disclosure Statement Page 5 of 8

6 6. Fees and costs DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns. For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return by up to 20% over a 30-year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such a superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the Fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investment Commission (ASIC) website ( has a managed investment fee calculator to help you check out different fee options. The following table provides an overview of the costs of acquiring units in the Fund, and the fees and costs charged in relation to your investment account or deducted from investment returns of the Fund s assets. The fees that are paid out of the Fund s assets are reflected in the Unit price. Fees when your money moves in or out of the Fund Establishment fee Contribution fee Withdrawal fee Termination fee AMOUNT Nil Nil Nil Nil Management costs The fees and costs for managing your investment Management Costs: the direct and indirect fees and expenses for managing your investment. 1.13% per annum of the net asset value of the Fund referable to W class Units (inclusive of GST, net of RITCs). For a constant investment of $50,000 the amount in dollars is $565. The amount of this fee may be negotiated. The information in the table above can be used to compare costs between different simple managed investment schemes. Fees and costs are deducted from the assets of the Fund and reduce the investment return to Unit holders. Example of annual fees and costs for the Fund This table gives an example of how the fees and costs for the Fund can affect your investment over a 1-year period. You should use this table to compare this Fund with other managed investment products. EXAMPLE BALANCE OF $50,000 WITH A CONTRIBUTION OF $5,000 DURING YEAR Contribution Fees Nil For every additional $5,000 you put in, you will be charged $0. Product Disclosure Statement Page 6 of 8

7 EXAMPLE Plus Management Costs % Equals Cost of Fund BALANCE OF $50,000 WITH A CONTRIBUTION OF $5,000 DURING YEAR And, for every $50,000 you have in the Fund, you will be charged $565 each year. If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees of: $565. What it costs you will depend on the investment option you choose and the fees. 2 1 This amount is inclusive of GST (net of RITCs). This figure represents the indirect cost ratio ( ICR ) of the Fund. The ICR is the ratio of the Fund s management costs that are not deducted directly from a Unit holder s account, to the Fund s total average net assets. This amount includes: (a) the direct management costs relating to this Fund; and (b) the indirect management costs made up of the fees and expenses relating to the Fund's investment in Templeton Global Trust Fund. 2 You should note that this example assumes a constant investment balance of $50,000 throughout the year. Management costs will also be charged in relation to any additional contributions you make during the year and the amount you pay will depend on the proportion of the year during which the additional contributions are invested. Please note there are no investment options in respect of this PDS. Note: This is just an example. In practice, the actual investment balance of an investor will vary daily and the actual fees and expenses we charge are based on the value of the Fund, which also fluctuates daily. Calculator The Australian Securities and Investments Commission provides a fees calculator on its website: To calculate the effect of fees and costs on your investment in the Fund you should refer to this calculator. Changes in fees We may vary the fees specified at any time at our absolute discretion, without Unit holder consent, subject to the maximum fee amounts specified in the Constitution. If the variation is an increase we will give you 30 days advance written notice. The Constitution provides for the following maximum fees relating to this Fund: an application fee of 2% of the application amount; and a management fee of 0.6% per annum of the net asset value of the Fund. We can recover out of the assets of the Fund all expenses which are properly incurred in operating the Fund, including, without limitation, amounts payable in connection with custody, compliance, legal and tax consulting fees, banking, accounting, audit and GST. Different fee arrangements We may enter into individual fee arrangements with wholesale clients (as defined in the Corporations Act) in accordance with applicable ASIC class order relief. 7. How managed investment schemes are taxed Warning Investing in a registered managed investment scheme is likely to have tax consequences. You are strongly advised to seek professional tax advice. You should note that: registered managed investment schemes do not pay tax on behalf of Unit holders; and Unit holders are assessed for tax on any income and capital gains generated by the Fund and distributed in accordance with the Constitution. 8. How to apply How to invest in the Fund To invest in the Fund, read this PDS, complete the Application Form which accompanies this PDS and provide any information requested in order to satisfy the Responsible Entity's AML/CTF obligations. The Application Form is also available from: or by calling The Responsible Entity authorises the use of this PDS by investors ( Indirect Investors ) who wish to access the Fund through an authorised master trust or wrap account, investor directed portfolio service, investor directed portfolio service-like scheme or nominee or custody service (collectively known as IDPS Service ) located in Australia. The operator of an IDPS Service is referred to in this PDS as the IDPS Operator and the disclosure document for an IDPS Service is referred to as the IDPS Guide. If you invest through an IDPS Service, your rights and liabilities will be governed by the terms and conditions of the IDPS Guide. Indirect Investors should apply for units by using the IDPS Guide provided by the IDPS Operator of the IDPS Service. Product Disclosure Statement Page 7 of 8

8 Complaints handling We have established procedures for dealing with complaints. If you are a Unit holder in the Fund (that is, you have not invested via an IDPS Service) and you have a complaint, you should contact our Client Services team on Your complaint will generally be acknowledged in writing and will be handled in accordance with our complaints handling procedures. We will seek to investigate and report to you on your complaint within 14 days of being notified of your complaint. If you have invested via an IDPS Service and have a concern, you should first contact the IDPS Operator of the IDPS Service through which you invested in the Fund. The IDPS Operator will handle your complaint in accordance with its complaint handling procedures and may, in accordance with those procedures, refer the complaint to us. IDPS Operators should write to our Compliance Officer at Level 19, 101 Collins Street, Melbourne Victoria, 3000 or call (03) If we receive a complaint from an IDPS Operator, we will acknowledge the IDPS Operator s concern, investigate it and report back to the IDPS Operator. Please note that the Financial Ombudsman Service may not deal with a complaint by a person who is not a retail client (as defined in the Corporations Act). If any issues remain unresolved, Unit holders can contact the Financial Ombudsman Service Limited on or at the address below: Financial Ombudsman Service Limited GPO Box 3 Melbourne VIC 3001 The dispute resolution process described in this offer document is only available in Australia and is not available in New Zealand. Privacy Policy Personal information that Franklin Templeton Investments Australia Limited holds about you will be handled in accordance with the company s Privacy Policy which is available at by calling us on or by ing us at ftclientservices@frk.com. Cooling off Under the Corporations Act, retail clients (as defined in the Corporations Act) have a cooling off right which allows them to change their mind about their investment in the Fund and ask for their money to be repaid. The cooling off right must be exercised within 14 days from the earlier of when you receive confirmation of your investment or at the end of the fifth business day after the day on which your Units were issued to you. The cooling off right terminates immediately if you exercise certain other investor rights, such as withdrawing part of your investment. The cooling off right does not apply in certain circumstances, such as where Units are issued upon the reinvestment of distributions. To exercise the cooling off right, we must be notified in writing before the expiry of the 14-day cooling off period. The repayment of your investment under the cooling off right is subject to an adjustment for market movements (both positive and negative) during the period the investment has been held. We may also deduct a reasonable charge for our administration costs and amounts in respect of tax. The right to cool off does not apply to you if you invest in the Fund through an IDPS Service as you do not acquire the rights of a Unit holder in the Fund or if you are a wholesale client (as defined in the Corporations Act). If you have any questions about cooling off rights contact your financial planner or our Client Services team on Other information We may retire as Responsible Entity of the Fund in accordance with the Constitution and the Corporations Act. Subject to the Corporations Act, we and our associates may hold Units. We are also permitted by the Constitution (subject to the Corporations Act) to deal with our self (as trustee of the Fund or in another capacity), an associate or any Unit holder; have an interest in any contract or transaction with our self (as trustee of the Fund or in another capacity), an associate or any Unit holder and retain for our own benefit any profits or benefits derived from such contract or transaction and act in the same or similar capacity in relation to any other managed investment schemes. In this PDS: Business Day means a day other than a Saturday or a Sunday or a public holiday on which banks are open for general banking business in Melbourne. "Constitution" means the constitution of the Fund as amended from time to time. Corporations Act means the Corporations Act 2001 (Cth). Fundamental company analysis means analysis that focuses on individual companies, rather than the industry in which a company operates or the economy as a whole. "IDPS Service" has the meaning given to the term in Section 8. RITC means reduced input tax credit. All references to monetary amounts are to Australian Dollars. FTIFAU PDSGE 03/14 Product Disclosure Statement Page 8 of 8