Reduced volatility. Tax efficient income.

What the Macquarie Dividend Run-Up Fund offers

 

Please note: this Fund is now closed to applications. Please contact your financial adviser for more information.

 

 

Total returns

Access dividends and potential stock price outperformance

Reduced volatility

Benefit from a risk management overlay

Tax efficient income

Generate tax efficient income with potential access to franking credits

Relative to traditional long-only equities funds in bearish, flat or moderately rising markets.

Reduce the impact of market falls with some downside protection.

Access franking credits to potentially reduce your tax burden*.

* Subject to the investor's eligibility to claim franking credits.

Leverage the fund manager's stock selection and risk management processes.

Suitable for both individuals and SMSFs*.

* Subject to the obligation of the trustees of SMSFs to formulate and implement an appropriate investment strategy that has regard to the whole of the circumstances of their fund and to act in the best interests of members of the fund.

Fund up to 75% of the investment by borrowing at attractive interest rates. Find out more.

As with any investment, there are risks associated with an investment in the Macquarie Dividend Run-Up Fund. These may include:

  • Investment risk: Poor performance of shares listed on the Australian stock market is likely to negatively impact the performance of the Fund.
  • Concentration risk: The Fund may have a high allocation to a small number of securities at any one time.
  • Fund Strategy risk: The Fund's performance depends on the dividend run-up phenomenon occurring to the degree expected. The manager may also change its investment strategies and internal trading guidelines over time, and there is no guarantee that such changes will produce favourable outcomes.
  • Hedging risk: The manager will employ a risk management overlay. This may have the effect of reducing the Fund's exposure to stock price falls and stock price increases. As a result, the Fund may make less money from a stock price increase than if it had not hedged some of its risk.
  • Distribution risk: Where the Fund receives franked dividends, the associated franking credits will not flow to you if the Fund does not have any distributable income or any net tax income in that financial year.

See Section 4 of the Product Disclosure Statement for more information on the risks associated with investing in the Fund.

About the Macquarie Dividend Run-Up Fund

About the fund

The Macquarie Dividend Run-Up Fund employs a specialist investment strategy designed to provide tax effective equity income at lower levels of volatility than traditional equity funds. The Fund achieves this by capitalising on the dividend run-up phenomenon via high yielding stocks that have been selected using the investment team's rigorous methodology.

The potential benefit of franking credits also provides you with a tax efficient investment (subject to the investor's ability to claim franking credits). While daily liquidity means you can access your investment when you want.

Investment objectives

The Macquarie Dividend Run-Up Fund aims to outperform its benchmark over the medium term (before fees) on a pre and post-tax basis. The Fund's benchmark is made up of 30% S&P/ASX 100 Accumulation Index and 70% Bloomberg AusBond Bank Bill Index, rebalanced quarterly.

Investment strategy

The Fund invests in high yielding Australian stocks in order to take advantage of pricing anomalies around stock dividend periods.

The investment team identifies stocks which it expects will either increase in value in the lead up to their ex-dividend date or will fall in price by less than the value of the cash dividend paid on their ex-dividend date.

Stocks are selected through a combination of quantitative screening and qualitative factors. The investment team actively optimises the Fund's portfolio allocation throughout the year, seeking to maximise yield and exposure to stock dividend periods.

The Fund provides you with the opportunity to earn total returns through distributions from dividend income (with potential franking credits attached) as well as any trading gains.

The Fund's risk management overlay also gives you greater protection and lower volatility compared to a direct investment in the equities market.

Read more about the Dividend Run-Up Fund in the Product Disclosure Statement.

How the Macquarie Dividend Run-Up Fund works

The dividend run-up phenomenon historically shows that, on average, stocks have made abnormal positive returns (relative to the market) around their earnings, dividend announcement and ex-dividend dates.

The Fund has been constructed to capitalise on this phenomenon by providing investors, including SMSFs*, with exposure to high yielding Australian stocks.

 

1 Subject to the investor's eligibility to claim franking credits.

* Subject to the obligation of the trustees of SMSFs to formulate and implement an appropriate investment strategy that has regard to the whole of the circumstances of their fund and to act in the best interests of members of the fund.

Product information

  Key features
Asset allocation
  • Australian stocks: 0% - 100%*
  • Cash: 0% - 100%*
Benchmark
  • 30%: S&P/ASX 100 Accumulation Index
  • 70%: Bloomberg AusBond Bank Bill Index
  • Rebalanced monthly
Minimum investment $20,000
Minimum additional investment $10,000
Liquidity Daily liquidity, subject to the responsible entity's ability to accept or reject any redemption application in its discretion
Suggested investment timeframe 3 to 5 years
Management costs 1.335% pa
Performance fee Nil
Buy spread Variable^
Sell spread - 0.30%

 

* Subject to the risk management overlay, including derivatives for hedging purposes.

^ Typically 0.30%, however the buy spread is expected to increase over the course of each calendar quarter to reflect an estimate of pro rata benefits accrued that are not reflected in the unit NAV and have not been distributed to existing unitholders.

Product documents

Product Disclosure Statement

Application Form

Information Booklet

1 November 2018 – updated dispute resolution details

If you have raised your concerns with our complaints team, and you are not satisfied with the outcome proposed or you believe that we have not resolved your complaint fairly, then you can request to have your complaint reviewed free of charge by:

Customer Advocate

The Customer Advocate’s role is to make it easier for our customer by helping to facilitate fair complaint outcomes and minimising the likelihood of future problems. For further information about our Customer Advocate, click here.

Australian Financial Complaints Authority (AFCA)

AFCA provides independent financial services complaint resolution that is free to consumers.

Website: www.afca.org.au
Email: info@afca.org.au
Telephone: 1800 931 678 (free call)
In writing to: Australian Financial Complaints Authority, GPO Box 3, Melbourne VIC 3001


Who may the Macquarie Dividend Run-Up Fund be suitable for?


  • Investors seeking exposure to Australian equities but with some downside protection
  • Investors who have a total return focus
  • Investors who want to access franking credits (though subject to the investor's eligibility to claim franking credits)
  • Investors wanting an asset allocation tool to diversify an existing investment portfolio through lower correlation to traditional equity market returns
  • Investors wanting a managed alternative to direct investment in high yielding Australian stocks.

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