SGH Property Income Fund

The Fund is an actively managed portfolio that primarily invests in Australian Real Estate Investment Trusts (“A-REITs”) designed to provide strong income and moderate capital growth over the medium to long term with a maximum exposure to Global Real Estate Investment Trusts (“G-REITs”) and cash of 20% each.

The Fund may also invest in real estate management, development and infrastructure securities.

Benefits of investing in the Fund include:

• Access to the expertise of a specialist investment boutique structure with an experienced and award winning dedicated A-REIT team.
• Active management aimed at maximising potential for superior risk adjusted returns over the medium and longer term.
• Greater liquidity than investing directly in property as can be traded on-market at any time. At the date of this PDS, the S&P/ASX 300 A-REIT Index is highly concentrated by a group of the largest A-REIT’s by market capitalisation. The Fund aims to offer investors a more diversified A-REIT portfolio than the S&P/ASX 300 A-REIT Index. Investors get the benefit of greater diversification by investing in the Fund as the maximum weighting of any security in this portfolio is 15%.
• Regular reporting to keep you up to date on your investments. 

The Fund aims to: produce an annual dividend yield (before fees) higher than the underlying index (S&P/ASX 300 A-REIT Index); and provide a total return p.a. in excess of the Consumer Price lndex (“CPI”) + 3% (before fees) over rolling 5 year periods. 

The Fund is designed for investors who seek an exposure to real property but require greater diversity and liquidity than an investment in direct property. The Fund invests in listed property securities designed to provide strong income and moderate capital growth over the medium to long-term.

The Fund primarily invests in A-REITs and may also invest in real estate management, development and infrastructure securities. An A-REIT is a collective investment vehicle, which owns a portfolio of real property, thus providing for a wider form of ownership. A-REITs are listed on the ASX, and their prices fluctuate with supply and demand, as with equity instruments. As a rule A-REITs derive the bulk of their income from rental property income.

The Fund generally seeks to invest in A-REITs that exhibit an above average proportion of their income sourced from rents rather than more volatile income streams such as third party construction or development. As a result of this strategy, the Fund’s investment portfolio typically has very different weights to that of the S&P/ASX 300 A-REIT Index.

The S&P/ASX 300 A-REIT Index has a high concentration towards the largest A-REITs. The Investment Manager believes that the investment strategy for the Fund is likely to provide superior portfolio diversification (by setting a maximum portfolio weight for any individual security in the portfolio at 15%), and the potential for a higher income yield than the S&P/ASX 300 A-REIT Index.

Investment Guidelines

The Fund will hold a minimum of 10 securities in its portfolio, with no one security making up more than 15% of the NAV of the Fund. It may invest in real estate management, development and infrastructure securities but the total exposure to these stocks will not be more than 15% of the NAV of the Fund. It may invest up to 20% of its portfolio in Global Real Estate Securities.

The minimum investment in REITs is 80% and the Fund may also hold up to 20% in cash. The Fund may invest in unlisted investments (if they are due to be listed within three months). However, if the Fund, by virtue of a corporate action or similar event, becomes entitled to an unlisted investment, the Fund may hold the unlisted investment.

The Fund is also permitted to use derivatives for currency hedging purposes only.

The asset class ranges are as follows: 

Due to movements in the market or similar events, the guidelines set out above may not be adhered to from time to time. In these circumstances, the Investment Manager will seek to bring the Fund’s investments within the guidelines within a reasonable period of time.

SGH has a formal Board endorsed environmental, social and governance (“ESG”) policy. This incorporates the guidelines from the Australian Council of Superannuation Investors, as well as the framework provided under the Principles for Responsible Investment.

SGH regards itself as a responsible investor and takes an active approach to integrating and embedding ESG considerations into its investment decision making process, and engaging with company board’s and management on ESG issues.

SGH believes effective governance structures and processes helps reduce risk, and provides insight into company’s culture and intangible assets, and is ultimately reflected in a company’s intrinsic value over the long term.

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Equity Trustees Limited (ABN 46 004 031 298, AFSL 240975), a subsidiary of EQT Holdings Limited (ABN 22 607 797 615) a publicly listed company on the Australian Securities Exchange (ASX:EQT), is the Responsible Entity of the Fund. SG Hiscock & Company (ABN 51 097 263 628 AFSL 240679) is the Investment Manager of the Fund and has prepared this information for general information purposes only. It does not contain investment recommendations nor provide investment advice. Neither SG Hiscock & Company Limited, Equity Trustees Limited nor its related entities, directors or officers guarantees the performance of, or the repayment of capital or income invested in the Fund. Past performance is not necessarily indicative of future performance. Professional investment advice can help you determine your tolerance to risk as well as your need to attain a particular return on your investment. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. You should not act in reliance on the information contained in this document. We strongly encourage you to obtain detailed professional advice and to read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) in full before making an investment decision. Equity Trustees Limited does not express any view about the accuracy or completeness of information that is not prepared by Equity Trustees Limited and no liability is accepted for any errors it may contain. Investors can acquire units by completing the application form accompanying a current PDS or, where available by making an application through the mFund settlement service (mFund) by placing a buy order for units with your licensed broker. A current PDS and Target Market Determination are available at www.sghiscock.com.au or can be obtained by contacting SG Hiscock & Company on 03 9612 4600 or 1300 555 511.