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Colonial First State Global Asset Management (Australia) Fund Limited (CFSGAM) Fund Changes Update

On 21 February 2018 Colonial First State Global Asset Management (CFSGAM) announced that they will be closing their Australian core equities and global resource capabilities which includes these funds:

 

  • Colonial First State Wholesale Global Resources (FSF0038AU)*
  • Colonial First State Wholesale Geared Australian Share – Core (FSF0453AU)*
  • Colonial First State Wholesale Australian Share – Core (CFM0404AU)*

 

From May 2018, Colonial First State will appoint new investment managers to manage these funds. The tables below provides a summary of the changes:

Janus Henderson Global Natural Resources will replace Colonial First State Global Resources

Investment option summary

Previous name: Colonial First State Wholesale Global Resources New name: Janus Henderson Wholesale Global Natural Resources
Previous objective New objective
To provide long-term capital growth by predominantly investing in resource companies from around the world. The option aims to outperform the Euromoney Global Mining Accumulation Index (75%) and the MSCI All Country World Energy Index (25%) over rolling five-year periods before fees and taxes. The option seeks to achieve a total return after fees and taxes that exceeds the total return of the S&P Global Natural Resources Accumulation Index over rolling five-year periods.
Previous strategy New strategy
The option’s strategy is to add value over the medium-to-long term by investing in quality global resource companies. Rather than attempting to predict commodity price movements, we choose to focus on quality resource companies around the world. These companies typically have strong balance sheets, quality management, high quality assets and a low cost of production. The option does not hedge currency risk.

The option will typically invest in 50-70 companies that the manager has identified as being quality global natural resource companies operating in the mining, energy and agriculture natural resources sectors.

The option may have exposure across upstream (production and exploration), midstream (storage, transportation and marketing commodities) and downstream (smelting, refining and selling of processed mineral, energy and agricultural products to end users) segments of the natural resources supply chain. The investment approach used by the manager utilises bottom-up fundamental research and screens for quality, valuation and growth potential to identify companies that are best placed to benefit from the ongoing demand for natural resources. The manager’s global investment approach enlarges the overall size and breadth of the natural resources investment universe and also improves the chance of early identification of profitable resource investment trends and pricing inefficiencies across global markets. The option does not hedge currency exposure back to the Australian dollar.

Previous benchmark New benchmark
Euromoney Global Mining Accumulation Index (75%) and the MSCI All Country World Energy Index (25%) S&P Global Natural Resources Accumulation Index
Previous asset allocation New asset allocation
Assets Range Benchmark Assets Range Benchmark
Australian and global
shares
90-100% 100% Global Shares 80-100% 100%
Cash 0-10% 0% Cash 0-20% 0%
Previous Standard Risk Measure# New Standard Risk Measure#
Very High (7) Very High (7)
Very High (7)
Range
Acadian Geared Australian Equity will replace Colonial First State Geared Australian Share – Core

Investment option summary

Previous name: Colonial First State Wholesale Geared Australian Share – Core New name: Acadian Wholesale Geared Australian Equity
Previous objective New objective
To magnify long-term returns by borrowing to invest, predominantly, in a selection of Australian companies within the S&P/ASX 100 Accumulation Index. The option aims to outperform the S&P/ASX 100 Accumulation Index over rolling seven-year periods before fees and taxes.
To maximise long-term returns by borrowing to invest, predominantly, in a selection of Australian companies within the S&P/ASX 300 Accumulation Index, while carefully controlling portfolio risk and transaction costs. The option aims to outperform the S&P/ASX 300 Accumulation Index over rolling seven year periods before fees and taxes.
Previous strategy New strategy
The option does not seek any style bias, such as to growth or value, and seeks to consistently add value through the investment cycle. Mispriced investment opportunities are identified following detailed fundamental research. The investment process incorporates a high number of company visits and a proprietary database to analyse company financials. Importantly, every company is assessed using a consistent set of criteria, which enables potential investments to be compared on a like-for-like basis. The option utilises gearing to magnify returns from underlying investments. This option predominantly invests in Australian companies and therefore does not hedge currency risk.
The option uses gearing with the aim of magnifying returns from the underlying Australian equity strategy. The underlying strategy aims to exploit the ‘low volatility anomaly’, the historical pattern in which higher volatility stocks have underperformed lower volatility stocks on a risk-adjusted basis. The resulting underlying portfolio aims to provide returns similar to those of the Australian equity market but with lower absolute volatility over the full market cycle. Gearing the underlying strategy has the potential to reduce drawdowns compared to gearing a normal index strategy and therefore aim to provide higher expected returns for lower risk over the long term.
Previous benchmark New benchmark
S&P/ASX 100 Accumulation Index
S&P/ASX 300 Accumulation Index
Previous asset allocation New asset allocation
Assets Range Benchmark Assets Range Benchamark
Australian shares 90-100% 100% Australian shares 90-100% 100%
Cash 0-10% 0% Cash 0-10% 0%
Previous Standard Risk Measure# New Standard Risk Measure#
Very High (7) Very High (7)
Very High (7)
Range
T. Rowe Price Australian Equity will replace Colonial First State Australian Share – Core

Investment option summary

Previous name: Colonial First State Wholesale Australian Share – Core New name: T. Rowe Price Wholesale Australian Equity
Previous objective New objective
To provide long-term capital growth with some income by investing predominantly in a broad selection of Australian companies. The option aims to outperform the S&P/ASX 200 Accumulation Index over rolling three-year periods before fees and taxes. To provide long-term capital growth through investment primarily in a portfolio of securities of Australian companies listed on the Australian stock exchange. The option aims to outperform the S&P/ASX 200 Accumulation Index over rolling three year periods after fees and taxes.
Previous strategy New strategy
The option does not seek any style bias, such as to growth or value, and seeks to consistently add value through the investment cycle. Mispriced investment opportunities are identified following detailed fundamental research. The investment process incorporates a high number of company visits and a proprietary database to analyse company financials. Importantly, every company is assessed using a consistent set of criteria, which enables potential investments to be compared on a like-for-like basis. This option predominantly invests in Australian companies and therefore does not hedge currency risk.

The strategy is a high conviction portfolio that seeks to identify high quality growing companies that T. Rowe Price expect to compound value faster than the overall market and outperform over time. The strategy relies on extensive proprietary fundamental research by an experienced Australian investment team collaborating with and receiving insights from the T. Rowe Price global research platform.

The strategy is a quality growth-oriented portfolio with fundamental, bottom up research at the core of the process. As a high conviction portfolio T. Rowe Price applies a proprietary business quality assessment process to identify high quality companies and non-consensus ideas. Detailed valuation work is then undertaken, utilising various techniques and scenarios, to ensure T. Rowe Price own these businesses at attractive prices.

Previous benchmark New benchmark
S&P/ASX 200 Accumulation Index
S&P/ASX 200 Accumulation Index
Previous asset allocation New asset allocation
Assets Range Benchmark Assets Range Benchamark
Australian shares 90-100% 100% Australian shares 90-100% 100%
Cash 0-10% 0% Cash 0-10% 0%
Previous Standard Risk Measure# New Standard Risk Measure#
Very High (7) Very High (7)
Very High (7)
Range

#Further information on the Standard Risk Measure ratings can be located in the Investment Options Menu within the FirstChoice Product Disclosure Statements

 

We will also be making changes to the asset allocation for Colonial First State Balanced, Colonial First State Diversified and Colonial First State High Growth funds as a result of the above changes. These funds are available through FirstChoice, Managed Investment Fund, Rollover & Superannuation Fund, Personal Pension Plan and Pooled Superannuation Trust.

 

Fund Asset Allocation New Asset Allocation
Colonial First State Balanced Asset Range Benchmark Asset Range Benchmark
Australian shares 15-25% 20% Australian shares 15-25% 20%
Global shares 10-25% 15% Globalshares 10-25% 15%
Property securities 0-10% 5% Property securities 0-10% 5%
Fixed interest and cash 40-60% 50% Fixed interest and cash 40-60% 50%
  Real Return 5-15% 10%
Colonial First State Diversified Asset Range Benchmark Asset Range Benchmark
Australian shares 25-35% 30% Australian shares 25-35% 30%
Global shares 15-25% 20% Global shares 15-25% 20%
Property securities 0-10% 5% Property securities 0-10% 5%
Global Infrastructure 0-5% 5% Global Infrastructure 0-5% 5%
Fixed interest and cash 20-40% 30% Fixed interest and cash 20-40% 30%
Global resources shares 5-15% 10% Real Return 5-15% 10%
Colonial First State High Growth Asset Range Benchmark Asset Range Benchmark
Australian shares
35-45%
40%
Australian shares 35-45%
40% 
Global shares
25-45%
35%
Global shares 40-60% 50%
Australian Small Comp 5-15% 10% Property securities 5-15% 10%
Cash 0-10% 0% Cash 0-10% 0%
Global resources shares 10-20% 15%  

*APIR codes shown are for FirstChoice Wholesale Investments

 

More information

If you are invested in any of these funds / options or have any questions regarding these changes, please speak to your financial adviser or call us on 13 13 36, Monday to Friday, 8am to 7pm Sydney time.
 

Fixed interest and cash

Disclaimer

Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of interests in FirstChoice Personal Super, FirstChoice Wholesale Personal Super, FirstChoice Pension, FirstChoice Wholesale Pension, FirstChoice Employer Super offered from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. It also issues interests in the Rollover & Superannuation Fund (ROSCO) and Personal Pension Plan (PPP) offered from the Colonial First State Rollover & Superannuation Fund ABN 88 854 638 840. Colonial First State also issues other investment products made available under FirstChoice Investments and FirstChoice Wholesale Investments, other than FirstRate Saver, FirstRate Term Deposits and FirstRate Investment Deposits which are products of the Commonwealth Bank of Australia ABN 48 123 123 124, AFS Licence 234945 (the Bank). The information contained in this letter is general information only and does not take into account your individual objectives, financial situation or needs. Our investor services representatives do not provide financial advice. We recommend you speak to your financial adviser for any personal advice or recommendations. 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. PDSs can be obtained from colonialfirststate.com.au or by calling us on 13 13 36.