22 November 2005
Macquarie Investment Management Limited today announced it has received a waiver from the ASX listing rules to offer a redemption facility on the Macquarie Winton Global Opportunities Trust.
This is a positive response from the ASX for the Australian listed managed investment scheme market, and is in line with market demands for such features to reduce the risk of the fund trading at a discount to net tangible assets (NTA).
Winton is a research driven organisation and has established a strong track record, ranked among the top performing managed futures managers as well as outperforming managed futures, global equity and hedge fund indices. The Macquarie Winton Global Opportunities Trust provides a global diversified investment fund in commodities, equities, bonds and currencies.
Statistical research by Winton is used to analyse market trends and establish trading strategies that aim to make inferences about the relative performance of more than 100 global markets.
Winton have achieved positive returns in the 10 worst months of the US equities markets since they started managing funds and the Macquarie Winton Global Opportunities Trust has been designed to offer investors an efficient way to access the investmentmanagement expertise of Winton with the security of capital protection of the Trust's investment.
The capital protection arrangements are designed to greatly reduce the impact on unit holders should there be any severe negative performance by Winton.
Macquarie recently applied to the ASX for certain waivers from regular listing rules that disallow redemptions of listed managed investments.
The ASX has approved this, enabling Macquarie to offer 'buybacks' from time to time, subject to certain ASX conditions. These buybacks may be offered if the Trust trades at a discount and could reduce the risk of trading at a discount to NTA. Units bought back from the market can be redeemed, reducing the total funds of the Trust.
"The problem with Listed Investment Companies (LICs) trading at a discount is not across the board," said Craig Swanger, Macquarie Division Director responsible for the Trust.
"On average, LICs were trading at a premium of just over seven per cent, however this is heavily weighted by the larger LICs, which, if excluded, the average becomes a premium of around 0.4 per cent.
"The best premiums of this remaining market are the unique ones and the ones not holding large amounts of cash. LICs such as Platinum Capital and Goldlink for example offer unique investments, (i.e. international equities and gold exposures respectively), and so have typically traded at premiums.
"The Winton Trust is unique in Australia. It will be the only listed vehicle offering investors access to a globally diverse range of asset classes, including commodities, currencies, equities and bonds and access to a fund manager in Winton Capital Management that has achieved more than 20 per cent per annum* returns during the past eight years.
"However, not all the unique LICs trade at premiums, so we see this mechanism as a 'backup plan' in the event that the Winton Trust does trade at a discount. Investors may then have the opportunity to sell their units back to the Trust at NAV less costs.
"These costs will be nil for the first five per cent and then a maximum of four per cent," Mr Swanger said.
Macquarie has also received recommended ratings from four independent research houses: Standard & Poors, Zenith, Aegis and Lonsec.
"The Macquarie Winton Global Opportunities Trust brings one of the world's top managed-futures managers to Australian retail investors," Mr Swanger said.
"Winton Capital, a United Kingdom-based manager, has a strong eight-year track record, producing an annual average rate of return of 21.5 per cent* .
Using advanced research and statistical techniques, Winton Capital invests in a broad range of global futures markets, providing sources of returns distinct from regular asset classes.
This helps keep correlations low between managed-futures funds of this type and bothequity and fixed-income markets," said Standard & Poor's fund analyst Simon Scott.
"Recent academic studies** have shown that inclusion of up to 20 per cent of managed futures in a balanced portfolio can improve overall risk and return. Indeed, managed futures can be a more effective diversifier than hedge funds, while a combination of both managed futures and hedge funds can further improve the overall risk and return," he said.
"As Winton Capital can derive returns in 120 different markets both long and short, investors need only form a view on their capabilities rather than construct a view on the overall direction of the market. The addition of capital protection on maturity to this product provides investors with extra comfort with what is likely both an unfamiliar manager and asset class," Mr Scott added.
* The Trust itself has no performance track record so Winton's track record is provided solely as a guide to their management capability. The Trust's performance will differ from that of Winton for a number of reasons outlined in the PDS. For example the capital protection approach will reduce the returns of the Trust. Past performance is not necessarily indicative of future performance. Source: Winton Capital Management Limited. Returns are for the period from October 1997 to 31 August 2005. Returns are expressed net of fees and are in USD. The returns quoted relate to Winton's flagship fund (Winton Futures Fund) ("WFF"). The performance of the WFF is not the performance of the Trust, which is new, has no performance history, and will be denominated in AUD.
* "Managed Futures and Hedge Funds:A Match Made in Heaven", Harry M.Kat, Professor of Risk Management, Cass Business School, City University, London, Nov 2002. "Handbook of alternative assets". Anson, Mark JP, 2002
"Benefits of Managed Futures 2005 Update", Isenberg School of Management, University of Massachusetts, Amherst, Massachusetts, June 2005.
For more information contact:
Head of PR & Communication
Macquarie Financial Services Group
Macquarie Funds Management Group
Tel: (612) 8232 3241
Mobile: (61) 417 260 309
Macquarie Adviser Services
Tel: (02) 8232 9138
Mobile: 0404 042 037
The offer relating to units in the Trust issued by MIML is made in the Macquarie Winton Global Opportunities Trust product disclosure statement dated 5 October 2005. Investments in the Trust can only be made by completing the application form that accompanies the PDS. This notice is not a product disclosure statement, and does not constitute an offer of financial products.
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