AUSTRALIAN CREDIT FUND

AUSTRALIAN AUSTRALIAN FIXEDCREDIT INCOMEFUND FUND FOR WHOLESALE INVESTORS ONLY Grow and diversify your wealth

The UBT Invest Australian Credit Fund (“Fund”) brochure summarises the key features of the Fund as outlined in the Information Memorandum (IM).

Invitations to apply for Ordinary Units (Offers) in the Fund are only available to Qualified Investors. Qualified Investors must meet both of the following requirements: • qualify as a wholesale client as defined in section 761G of the Corporations Act (Wholesale Client); and • be approved by the Class A Unitholder (currently UBT Marketing Pty Limited [UBT]) in its absolute discretion. If you are unsure whether you qualify, please contact your legal or financial adviser. If you are a Qualified Investor, you should read the entire IM, obtain and consider any further information that you need, and consult with your professional advisers before deciding whether to invest in Ordinary Units in the Fund.

HOW IS THE FUND STRUCTURED The Fund is a Unit Trust. There are two classes of Units in the Fund: • Class A Units that are held by UBT, and • Ordinary Units that are available for investment by Qualified Investors (as described below). A Unit is an undivided beneficial interest in the Fund held on the terms in the Trust Deed for the Fund. The Trustee (or a custodian that it appoints) is the legal owner of the Fund assets. An investor in Ordinary Units or Class A Units does not have an interest in any particular Fund asset and has no right to any particular Fund asset or to an in specie distribution of Fund assets. Only cash payments from the Fund will be made to investors holding Ordinary Units or Class A Units.

WHAT IS THE FUND’S INVESTMENT OBJECTIVE The objective of the investment manager is to manage the Fund’s assets with the aim of generating returns in excess of the RBA Cash Rate (Benchmark) by 3% per annum before the Fund’s fees and expenses and the deduction of the Class A Distributable Amount, over a period of 3 to 5 years. There is no guarantee the objectives will be accomplished.

Any return would be calculated and distributed between the Ordinary and Class A Unitholders as described below. The investment manager seeks to achieve the objective by selecting Fund investments (directly or indirectly) in fixed income securities that are expected to deliver income and yield. For the risks associated with achieving these objectives, please refer to the Key Risks of the Fund in this document.

WHAT IS THE INVESTMENT STRATEGY & FUND COMPOSITION The fixed income securities into which the Fund invests will typically be cash and interest rate securities such as corporate debt, Hybrid Securities and Structured Debt Securities, including residential mortgage backed securities (RMBS) and asset backed securities. The assets will either be purchased directly or an investment may be made by investing into a managed investment schemes or trust that invests in such assets.

INVESTOR INFORMATION

Qualified Investors

Class A Distributable Amount

Ordinary Units will only be issued to investors who are: • approved by the Class A Unitholder (currently UBT) in its absolute discretion; and • qualify as a Wholesale Client and therefore may invest in Ordinary Units without a product disclosure statement in accordance with Part 7.9 of the Corporations Act.

Income is distributed to the Class A Unitholder at the end of each financial year. However, Distributable Income for the Fund is calculated at the end of each month.

Issue Price of Ordinary Units The Issue Price for the first issue of Ordinary Units on the First Issue Date is $1 per Unit. The Issue Price for Ordinary Units issued after that time is the Adjusted Fund NAV per Ordinary Unit in issue at that time plus the Buy Spread. The Adjusted Fund NAV for this purpose and for calculation of the amount payable on redemption of the Ordinary Units is the net asset value of the Fund (Fund NAV) less each of the following to the extent not taken into account when calculating the Fund NAV: • • •

Fund fees, expenses and liabilities; $100 provision for redemption of all of the Class A Units; and The accruing unpaid Class A Distributable Amount (if any) for that financial year as at the end of the month.

The Buy Spread is set by the Trustee. As at the date of the IM, the Buy Spread is 0.20% of the Issue Price of a Unit.

The Class A Distributable Amount is 50% of the positive Performance Surplus up to an annual cap of 0.6%pa of Fund NAV and subject to a minimum or floor of zero. There is no guarantee that there will be Distributable Income in any month or other period or that the Class A Unitholder will receive any income in any period. There is no guarantee that there will be Distributable Income in any month or other period or any Ordinary Unitholder will receive any income in any period.

Income Distribution on the Ordinary Units Income will be calculated and paid Quarterly to the Ordinary Unitholders pro rata to the number of Ordinary Units that they hold at the end of the Quarter. Distributable Income for a Quarter that is available for distribution amongst Ordinary Unitholders is: • net of all Fund fees and expenses for the Quarter (including fees payable to the Trustee and Investment Manager); and • net of the accruing Class A Distributable Amount. Distributable Income will generally exclude any unrealised gains and losses on the Fund’s investments. Each Quarter for distribution ends 30 September, 31 December, 31 March and 30 June. Distributions will be paid within 15 Business Days after the end of the Quarter.

Key Facts

Target returns

The Fund aims to generate returns in excess of 3% per annum above the RBA Cash Rate before the Fund’s fees and expenses and before deduction of the Class A Distribution Provision Accrual, over a period of 3 to 5 years.

Recommended investment period

3-5 years

Investment strategy & fund composition

Typically cash and interest rate securities, such as corporate debt, Hybrid Securities and Structured Debt Securities, including residential mortgage backed securities (RMBS) and asset backed securities

Buy/Sell Spread

The Buy Spread is 0.20% of the Adjusted Fund NAV per Ordinary Unit and is added into the issue price of an Ordinary Unit. The Sell Spread is also 0.40% of the Adjusted Fund NAV per Ordinary Unit that is deducted from the amount paid on redemption of a Unit.

Distributions for Class A Unitholders

Annually

Distributions for Ordinary Units

Quarterly

Minimum initial investment

$50,000 or such other amount as the Trustee determines

Minimum additional investment

$10,000 or such other amount as the Trustee determines

Minimum balance

Ordinary Units with an aggregate Redemption Price of $5,000 or such other amount as the Trustee determines

Minimum redemption

$10,000 or, if less, your entire holding of Ordinary Units or such other amount as the Trustee determines

Valuations

Monthly, as at the last day of each month, and such other times as the Trustee determines

Fees

Management fee is estimated to be 0.55% p.a. (inclusive of GST and net of any applicable RITC) of the Fund’s gross value. Due to certain minimum fees and expenses (administration and other), %pa of Fund’s gross value varies with Fund value. Please refer to the IM for an example of %pa management and administration expense (inclusive of GST net of RITC) at different Fund gross values.

Key Risks There are risks associated with investing in the Fund. The risks include but are not limited to the key risks described below. Please refer to Section 6 of the IM which also sets out a description of some of the main risks that investors should consider in consultation with their financial advisers before deciding to invest in the Fund.

Interest Rate Risk

The risk that the value of the Fund may be adversely affected when interest rates rise or fall. As the Fund is invested in fixed rate or floating rate securities, the value and income of the Fund can fluctuate significantly in response to changes in interest rates.

Market Risk

The risk of adverse movements in markets (including asset and share prices, volatility, changes in interest rates or other market variables) impacting upon assets held in the Fund. There is a risk that a particular investment held in the Fund will be unable, or will not easily be able, to be liquidated at or near the previous market price, due to inadequate market depth or to disruptions in the marketplace.

Liquidity Risk

If the investments of the Fund are made by investing in another managed investment scheme then the Trustee’s ability to effect withdrawals will depend on realisations being effected from that scheme. For instance, if that scheme becomes illiquid or there are delays in redemptions of investments in that scheme due to large volumes of withdrawals from that scheme, this will in turn affect the redemption of Ordinary Units in the Fund and payment of the Redemption Price. There is also a risk that the Fund may become illiquid. If this were to happen, the Trustee may not process any redemption requests. If this were to happen, investors would be unable to redeem their Ordinary Units. Withdrawals may also be suspended in certain circumstances, including where it is considered that processing withdrawals would be adverse to investors in the Fund as a whole. The Fund is not quoted on a securities exchange and Ordinary Units are not listed. It is not expected that there will be a secondary market for them.

Credit Risk

The Fund may not receive income and may suffer a capital loss on any investment held in the Fund. This could occur, for example, where the issuer of the investment does not meet its obligations to pay interest or principal in full or on time or, if an indirect investment becomes illiquid and cannot be realised or realisation of the investment or payment of any realisation amount is delayed.

No guarantee of any income, return or repayment of amount invested in Ordinary Units

There is no guarantee that a Unitholder will receive any or any particular income or rate of return from their investment in Ordinary Units (including returns in excess of the RBA rate) or that they will receive back the amount that they initially investment in the Ordinary Units on redemption of the Ordinary Units or if the Fund is wound up.

Investments in Ordinary Units are not deposits and do not have any government guarantee

Investments in Ordinary Units in the Fund are not deposits and therefore do not have the benefit of priority and rank behind any creditors in relation to Fund fees, expenses and liabilities and, unlike some bank deposits, an investment in Ordinary Units does not have the benefit of any government guarantee.

Issue Price and Redemption Price based on the Class A Distribution Provision Accrual at the time of calculation

The Class A Distribution Provision Accrual in the Fund’s books at the time that the Issue Price or Redemption Price for Ordinary Units is calculated reduces that price. The Issue Price for Units that have been issued and the redemption price for Units that have been redeemed is not subject to subsequent adjustment if the Class A Distribution Provision Accrual changes in subsequent months. For instance, if it increases or decreases over subsequent months or is a greater or lesser amount when actually distributed as at the end of the financial year, this will not result in any recalculation of prior Issue Prices or Redemption Prices. Although Unitholders may request redemption of their Ordinary Units each month, in certain circumstances, redemptions may not be effected or the payment of redemption proceeds may be delayed indefinitely.

Redemption risk

Taxation Risk

In certain circumstances the Trustee may compulsorily redeem your units without your consent. Such circumstances may include where you cease to be Qualified Investor, that is, you cease to be a Wholesale Client or cease to be approved by the Class A Unitholder (currently UBT) in its absolute discretion.

There is a risk that changes in the taxation rules, regulations and laws (or changes in the manner in which the relevant taxation commissioner or agency may interpret those rules, regulations or laws) in Australia or other countries in which the Fund may invest, may adversely affect the Fund or Investors.

IMPORTANT INFORMATION This product brochure is a summary of the Information Memorandum (IM) which is issued by Evolution Trustees Limited ABN 29 611 839 519 AFSL 486217 (Trustee) in its capacity as the trustee of the UBT Invest Australian Credit Fund (Fund). The Fund was established on 17 August 2017. The Trustee reserves the right to update, withdraw or change the IM. This document has been prepared without taking into account the investment objectives, financial situation or needs of any particular investor. Prospective investors are not to construe the contents of this document as tax, legal or investment advice. You should consult with your financial adviser and obtain professional advice about an investment in Ordinary Units in the Fund having regard to your particular investment needs, objectives and financial circumstances before investing. To the maximum extent permitted by law, neither the Trustee, Mason Stevens Asset Management nor any of their associates, related parties, directors, officers, employees, advisers (including financial, accounting and legal advisers) or representatives make any recommendation in relation to the Fund, or make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of the information contained in this document or the IM. This document does not purport to contain all of the information that a prospective investor may require in evaluating an investment in the Fund. This document must be read in conjunction with the Fund’s Trust Deed and other Fund documents, copies of which are available (free of charge) by contacting the Trustee. To the extent there are any inconsistencies between the Trust Deed, this document or the IM, the Trust Deed or the IM will prevail. Each recipient of this document receives it on the basis that they agree and acknowledges that they must rely on its own investigations and enquiries with respect to making any decision to invest in the Fund and, as this document is general information only (and may be out of date), does not rely on the information set out in this document in making an investment decision. Information in this document is current as at the date of this document but may change from time to time. Changes in information regarding the Fund are posted on www.ubteam.com.au. Forward looking statements that may, for instance, contain the words “believe”, “intend”, “estimate”, “expect” and similar expressions involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward looking statements. There can be no assurance that such statements, estimates or projections will be realised. Except in certain circumstances (including fraud, negligence or default by the Trustee), the Trustee enters into transactions in relation to the Fund in its capacity as trustee of the Fund only, and its liability in relation to those transactions is limited to its rights of indemnity from the assets of the Fund.

Contact us

If you would like to discuss how investing with UBT Invest can support you to pursue your financial goals, please get in touch with UBT Invest [email protected] or at 1300 01 01 02. We’re happy to help!