Trustee investment limits
As part of the trustee's fiduciary obligation to investors and having taken into account a range of factors including risk, diversification and liquidity, some restrictions have been placed on certain types of investments available. These restrictions are designed to reduce the potential for large losses by encouraging diversification and to ensure adequate liquidity to meet payments and satisfy regulatory requirements. Please note that limits do not eliminate the risk of large losses.
We may change investment limits and may also place additional limits upon individual investments within each investment strategy at any time. If we determine that investment limits are to be added, withdrawn or amended we will endeavour to provide you and/or your adviser with advance notice of the change, however, this may not be possible in all circumstances.
How the limits are applied
Investment limits are applied at the time of your purchase and are a percentage of the total purchase price (including brokerage) of the asset against your account balance. In calculating the limit, your total account balance includes your Cash Account, approved ASX listed securities, managed investments and term deposits.
For partly paid securities, we may require you to maintain sufficient funds in your Cash Account to cover all future instalments.
Where a requested transaction will result in your security holding moving outside an approved limit, your transaction may be rejected by the trustee or you may be instructed to bring the holding within the trustee limits.
What are the investment limits?
Where applicable, securities are classified as defined by the ASX.
| Investment type | Maximum of your total account balance that can be invested |
| ASX Listed securties | |
| General Limites | |
| 25% |
| 40% |
| 50% |
| Security specific limits | |
| 25% Must have an investment grade rating (or better) from Standard & Poors, Moodys or Fitch. Otherwise, it will fall within the General limits outlined above. |
| No limit Exchange traded funds must be tracking a global or international index or tracking a major Australian index2 |
| Limits will be applied against the underlying issuer3 |
| Limits will apply against the underlying security and its value, not the value of the instalment warrant5 |
| Limits will apply as above against the full issue price, rather than the initial instalment6 |
| Initial public offerings | |
| 10% Once listed on the ASX, the company will fall into the General or Security specific limits outlined above |
| Term deposits | |
| 80% |
| Absolute return investments or mortgage funds | |
| 10% 20% |
1 "Fully replicated" means being composed of physical holdings of the component securities, not "synthetically structured" (where, for example, the index is tracked through derivatives). All other listed investment companies or exchange traded funds limits will apply as per the General Limits outlined above.
2 "Major Australian index" means an index comprised at least the 20 largest stocks by market capitalisation Australia (e.g. S&P/ASX 20, S&P/ASX 50, S&P/ASX 100 etc). It does not include sector specific indices. All other listed investment companies or exchange traded funds limits will apply as per the General Limits outlined above.
3 For example, if a company issued a corporate bond, the trustee limit will be applied against the sum of your holding in company.
4 Please note, we may require you to maintain sufficient funds in your Cash Account to cover all future instalments. Other types of instalment, endowment and trading warrants or exchange traded options are not currently available.
5 For example, if you purchase 1,000 shares in a self-funding instalment warrant, the limit will be applied as if the order was for 1,000 shares in the underlying issuer.
6 For example, a partly paid security with an initial instalment of $1 per security and a full issue price of $2 per security, will have trustee limits applied against the $2 per security value.
Part A of the Avenue Retirement Service PDS