Changes to Goldman Sachs Wholesale Australian Infrastructure option
On 24 October 2016, the investment manager, name and features of the Goldman Sachs Wholesale Australian Infrastructure option changed. The option is now managed by Legg Mason Asset Management Australia (Legg Mason) and named the Legg Mason Martin Currie Wholesale Real Income option.
Why the change?
Goldman Sachs Asset Management Australia (GSAM), the investment manager of the Goldman Sachs Wholesale Australian Infrastructure option, announced in May that they were reviewing their Australian asset management business which was likely to result in a decision to sell that business.
We undertook a review of the investment option and decided to replace the investment manager. The new investment manager of the option, Legg Mason, will implement a comparable investment objective and strategy for the option.
The table below provides a summary of the changes:
|Investment option summary|
|Previous name: Goldman Sachs Wholesale Australian Infrastructure||New name: Legg Mason Martin Currie Wholesale Real Income|
|Previous objective||New objective|
|To achieve a balance of income and medium-to-long-term capital growth by investing primarily in Australian listed infrastructure and utilities securities. This option aims to outperform the CPI plus 4% over rolling three-year periods before fees and taxes.||To provide an annual income in excess of the S&P/ASX 200 Index unfranked yield over a rolling 3 year period before fees and after taxes. The option aims to provide long term growth in its income stream in excess of the rate of inflation (CPI).
|Previous strategy||New strategy|
|The option’s manager takes an active bottom-up approach to selecting infrastructure stocks. The option’s investment manager aims to: assess the industry and regulatory outlook, as well as the competitive position of an infrastructure business; target infrastructure companies with exposure to capital-intensive, long-life assets with inflation-linked pricing; and identify infrastructure stocks believed to be undervalued by the broader sharemarket. This approach to investing aims to ensure consistency of research across investment opportunities.
||The Manager applies a tailored investment approach to construct a portfolio of ASX listed real income securities (such as property, utility and infrastructure securities), to deliver sustainable income over the medium to long term. The Manager assesses each investment for its dividend-paying attributes, as well as its risk quality and ability to provide inflation protection over time. Disciplined portfolio construction rules and risk controls are utilised by the Manager to help construct a portfolio of Australian real income securities that aims to offer liquidity and investment transparency.
|Previous asset allocation||New asset allocation|
|Infrastructure and securities||80 ‑ 100%||100%||Australian property, utility and infrastructure securities
||90 ‑ 100%||100%|
|Cash||0 ‑ 20%||10%||Cash||0 ‑ 10%||10%|
This option will now invest in ASX listed utility and infrastructure securities as well as ASX listed property securities. As a result of investing in property securities, the transaction costs per transaction for this option will increase from 0.15%/0.15% to 0.20%/0.20%. This change will be effective from the 12 December 2016. The total management costs of the option will remain the same.
You don’t need to take any action as a result of this change
The Legg Mason Martin Currie Wholesale Real Income option will remain closed to new investors. If you’re an existing investor, you can continue to transact on the option. However, if you do not wish to be invested in this option, you can switch at any time. Please note the transaction costs per transaction for this option, referred to above, will increase from 12 December 2016.
We’re here to help
If you would like more information about this option, including how to switch from it, please speak to your financial adviser or call us on 13 13 36 Monday to Friday, 8am to 7pm Sydney time.
Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of super, pension and investment products. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. A PDS for Colonial First State’s products are available at colonialfirststate.com.au or by calling us on 13 13 36.