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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 If we determine that investment limits are to be added, withdrawn or amended we will endeavour to provide you and/or your adviser with advance notice of the change, however, this may not be possible in all circumstances.

What are the investment limits?

Absolute return investments

The trustee has established guidelines with regard to exposure to absolute return investments. These limits are:

  • a maximum of 20% of your total account balance invested in all absolute return investments and
  • a maximum of 10% of your total account balance invested in any single absolute return investment.

ASX listed securities

The trustee has established guidelines with regard to exposure to ASX listed securities. These limits are:

  • a maximum of 25% of your total account balance invested in any single security within the S&P/ASX 100
  • a maximum of 25% of your total account balance invested in any single structured credit product with an investment grade rating from Standard & Poors, Moodys or Fitch
  • a maximum of 15% of your total account balance invested in any single security within the S&P/ASX 200 (and not in the S&P/ASX 100)
  • a maximum of 40% of your total account balance invested in all other ASX listed securities outside the top S&P/ASX 200 and a maximum of 10% of your total portfolio balance invested in any single security outside the top S&P/ASX 200 and
  • a maximum of 50% of your total account balance invested in a single S&P/ASX Global Industry Classification System (GICS) industry group.

No limits apply to listed investment companies and exchange traded funds, as defined by the ASX.

Initial public offerings will be limited to a maximum of 10% of your total account balance invested in the company listed. Once listed on the ASX, the company will fall into the limits outlined above.

Where a security is partly paid (issued in instalments), limits will apply to the full issue price, rather than the initial instalment. 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.

For self-funding instalment warrants, trustee limits are applied against the value of the underlying security, not the value of the instalment warrant. Other types of instalment, endowment and trading warrants or exchange traded options are not currently available.

Self-funding instalment warrants and partly paid securities purchased through a nominated external broker can be held in your account. These cannot be traded online, via our website, by your adviser.

For partly paid securities, we may require you to maintain sufficient funds in your Cash Account to cover all future instalments.

Term deposits

The trustee has established guidelines with regard to exposure to term deposits. This limit is a maximum of 80% of your total account balance invested in all term deposits.

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.

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.