Sestante Global Macro Fund · 22/03/2019 · Key features of the Sestante Global Macro Fund...

Product Disclosure Statement

Sestante Global Macro FundDated: 22 March 2019

ARSN: 619 981 752 | APIR: PAT5878AU

Responsible Entity:AZ Sestante LimitedABN 94 106 888 662 | AFSL 284442Level 13, 1 Margaret Street, Sydney NSW 2000

Investment Manager:AZ Fund Management S.A.35 Avenue Monterey, L-2163 Luxembourg, Grand Duchyof Luxembourg

Contact detailsIronbark is responsible for providing client services to this Fund.If you have an enquiry or would like more information, you canspeak to an Ironbark representative between 9.00 am and5.30 pm (AEST), Monday to Friday (excluding public and bankholidays in NSW).

Ironbark Client Services:

Phone: 1800 034 402

Email: [email protected]

Website: www.azsestante.com

Contents

1. Key features of the Sestante Global MacroFund page 3

2. Summary of disclosure benchmarks page 4

3. Summary of disclosure principles page 6

4. Management of the Sestante Global MacroFund page 9

5. Details about the Sestante Global Macro Fund page 9

6. Risks of investing in the fund page 13

7. Fees and other costs page 14

8. Taxation page 17

9. How to apply page 19

10. Withdrawals page 20

11. Other important information page 21

12. Glossary page 24

Product Disclosure Statement | Sestante Global Macro Fund 1

Important information

This Product Disclosure Statement (‘PDS’) in respect of theSestante Global Macro Fund ARSN 619 981 752 (‘Fund’) hasbeen prepared and issued by AZ Sestante LimitedABN 94 106 888 662 AFSL 284442 (‘Responsible Entity’, ‘we’,‘us’, ‘our’). The information provided in this PDS is generalinformation only and does not take account of your personalfinancial situation or needs. It is not intended to be arecommendation by the Responsible Entity or InvestmentManager, any associate, employee, agent or officer of theResponsible Entity, Investment Manager or any other person toinvest in the Fund. You should not base your decision to invest inthe Fund solely on the information in this PDS. You shouldconsider the suitability of the Fund in view of your financialposition and investment objectives and needs and you may wantto seek advice before making an investment decision.

The Responsible Entity, Investment Manager or any of theiraffiliates, employees, agents or officers do not guarantee thesuccess, repayment of capital or any rate of return on income orcapital or the investment performance of the Fund. Pastperformance is no indication of future performance. Units in theFund are offered and issued by the Responsible Entity on theterms and conditions described in this PDS. You should read thisPDS in its entirety before making any decision to invest in theFund.

In particular, in considering whether to invest in the Fund,investors should consider the risk factors that could affect thefinancial performance of the Fund. Some of the risk factorsaffecting the Fund are summarised in Section 6.

Indirect InvestorsThe Responsible Entity has authorised the use of this PDS asdisclosure to investors and prospective investors who investdirectly in the Fund, as well as investors and prospectiveinvestors of an investor directed portfolio service, master trust,wrap account, an investor directed portfolio service-like schemeor a similar arrangement (‘IDPS’). This PDS is available for useby persons applying for units through an IDPS (‘IndirectInvestors’). The operator or trustee of an IDPS is referred to inthis PDS as the ‘IDPS Operator’ and the disclosure documentfor an IDPS is referred to as the ‘IDPS Guide’. If you investthrough an IDPS, your rights and liabilities will be governed bythe terms and conditions of the IDPS Guide. Indirect Investorsshould carefully read these terms and conditions beforeinvesting in the Fund. Indirect Investors should note that they aredirecting the IDPS Operator to arrange for their money to beinvested in the Fund on their behalf. Indirect Investors do notbecome unit holders in the Fund and do not have rights of unitholders. The IDPS Operator becomes the unit holder in the Fundand acquires these rights. Indirect Investors should refer to theirIDPS Guide for information relating to their rights andresponsibilities as an Indirect Investor, including information onany fees and charges applicable to their investment. Informationregarding how Indirect Investors can apply for units in the Fund(including an application form where applicable) will also becontained in the IDPS Guide. The Responsible Entity accepts noresponsibility for IDPS Operators or any failure by an IDPSOperator to:

• provide Indirect Investors with a current version of this PDSas provided by the Responsible Entity; or

• withdraw this PDS from circulation if required by theResponsible Entity.

Please ask your adviser if you have any questions aboutinvesting in the Fund (either directly or indirectly through anIDPS).

The offer to which this PDS relates is only available to personsreceiving this PDS in Australia and New Zealand.

New Zealand warning statement

This offer to New Zealand investors is a regulated offer madeunder Australian and New Zealand law. In Australia, this isChapter 8 of the Corporations Act 2001 (Aust) and regulationsmade under that Act. In New Zealand, this is subpart 6 of Part 9of the Financial Markets Conduct Act 2013 and Part 9 of theFinancial Markets Conduct Regulations 2014.

This offer and the content of this PDS are principally governedby Australian rather than New Zealand law. In the main, theCorporations Act 2001 (Aust) and the regulations made underthat Act set out how the offer must be made.

There are differences in how financial products are regulatedunder Australian law. For example, the disclosure of fees formanaged investment schemes is different under the Australianregime.

The rights, remedies, and compensation arrangementsavailable to New Zealand investors in Australian financialproducts may differ from the rights, remedies, and compensationarrangements for New Zealand financial products.

Both the Australian and New Zealand financial markets’regulators have enforcement responsibilities in relation to thisoffer. If you need to make a complaint about this offer, pleasecontact the Financial Markets Authority, New Zealand(fma.govt.nz). The Australian and New Zealand regulators willwork together to settle your complaint.

The dispute resolution process described in this PDS isavailable only in Australia and is not available in New Zealand.

The taxation treatment of Australian financial products is not thesame as for New Zealand financial products.

If you are uncertain about whether this investment is appropriatefor you, you should seek the advice of an appropriately qualifiedfinancial adviser.

The offer may involve a currency exchange risk. The currencyfor the financial products is not New Zealand dollars. The valueof the financial products will go up or down according tochanges in the exchange rate between that currency and NewZealand dollars. These changes may be significant.

If you expect the financial products to pay any amounts in acurrency that is not New Zealand dollars, you may incursignificant fees in having the funds credited to a bank account inNew Zealand in New Zealand dollars.

This PDS is available at www.azsestante.com or you canrequest a copy free of charge by calling Ironbark Client Serviceson 1800 034 402. Certain information in this PDS is subject tochange. We will notify you of any changes that have a materiallyadverse impact on you or other significant events that affect theinformation contained in this PDS. Any updated informationwhich is not materially adverse may be obtained online atwww.azsestante.com or by calling Ironbark Client Services on1800 034 402. A paper copy of the updated information will beprovided free of charge on request.


Key features of the Sestante Global Macro Fund

Investment objective The Fund aims to outperform the RBA Cash Rate +2% p.a. before fees with volatility of less than4% and low correlation to traditional financial markets over rolling 1 year periods.

Fund structure The Sestante Global Macro Fund (‘Fund’), is a registered Australian managed investmentsscheme. The Fund gains its investment exposure by investing into the Australian dollar (‘AUD’)denominated class of units, of the AZ Multi Asset Institutional Macro Dynamic Trading Fund(‘Underlying Fund’), a Luxembourg domiciled fund managed by AZ Fund Management S.A. (‘AZFund Management’).

Investment style andapproach

The Fund, via its investment in the Underlying Fund, adopts a global macro-economic investmentstrategy that involves taking long and short positions in futures on financial indices of various types(equity securities, bonds, currencies and raw materials). Short positions will be taken exclusivelyon derivative financial instruments. The Underlying Fund may also use derivative financialinstruments not only for direct investment purposes noted above but also for hedging purposes andfor effective portfolio management.

Standard risk measure 7 - Very high risk of short term loss

Investor suitability Investors who seek risk adjusted returns with controlled volatility through a global, diversified,multi-asset investment strategy with low correlation to traditional financial markets.

Suggested min timeframe 3 to 5 years

Minimum initial investment $20,000

Minimum additionalinvestment

$1,000

Minimum withdrawalamount

$1,000

Minimum balance $20,000

Cut off time for applicationsand withdrawals

2.00pm (Sydney time) on a Business Day

Unit pricing Daily unit pricing

Applications andwithdrawals

Applications and withdrawals are processed on a daily basis.

Distributions Distribution (if any) is paid annually as at 30 June.

Management cost 0.8956%

Performance fee 10% of the percentage increase in net asset value (’NAV’) after ongoing fees are deducted(adjusted for the issuance and withdrawals of units and distributions) in excess of the RBA CashRate plus 2% p.a. and provided the Fund’s total return is above 0% and the previous High WaterMark has been exceeded. The Fund’s constitution refers to this fee as the Incentive Fee.

Buy/sell spread Nil

Entry fee / exit fee Nil


Summary of disclosure benchmarks

In ASIC Regulatory Guide RG 240 Hedge funds: Improving disclosure (‘RG 240’), ASIC has developed two benchmarks for funds thatmeet ASIC’s definition of a ‘hedge fund’, and expects issuers of products of such funds to disclose in a Product Disclosure Statementwhether the responsible entity meets the benchmarks on an ‘if not, why not’ basis.

The following table provides a summary of the benchmarks set out in RG 240 and a summary of information about how we meet thebenchmarks. You should consider this information together with detailed explanation of the cross-referenced information set out inthis PDS and the key risks of investing in the Fund highlighted in section 6 of this PDS.

The information in this section about the RG 240 benchmarks will be updated periodically. This updated information is available on ourwebsite and a paper copy will be given to you, without charge, upon request by calling Ironbark Client Services.

Benchmark Summary

Is theBenchmarksatisfied?

Furtherinformation

Benchmark 1: Valuation of Assets

This benchmark isintended to supportinvestor confidence inthe value of thenon-exchange tradedassets of the fund byaddressing whethervaluations of a fund’snon-exchange tradedassets are provided byan independentadministrator or anindependent valuationservice provider.

The valuation of the Underlying Fund’s assets is provided by theUnderlying Fund’s administrator, BNP Paribas Securities Service,Luxembourg branch (‘BNP Paribas’). BNP Paribas is independentfrom Ironbark, AZ Sestante Limited and AZ Fund Management S.A.Net asset valuations of the Underlying Fund is calculated as at theend of each business day. BNP Paribas is responsible for certain dayto day operations such as capturing and recording daily trade andportfolio information of the Underlying Fund. The Fund values itsinvestment in the Underlying Fund based on the NAV calculated byBNP Paribas.

The Responsible Entity maintains sufficient expertise to monitor theperformance of any asset valuation services provided by thirdparties.

Further information on the valuation of the Fund’s assets is set out insection 5.

Yes Section 5


Benchmark Summary

Is theBenchmarksatisfied?

Furtherinformation

Benchmark 2: Periodic Reporting

This benchmark isaimed at ensuring thatinvestors receive timely,basic fund investmentperformanceinformation on aperiodic basis to makeinformed investmentdecisions.

The Responsible Entity has a policy to report on the followinginformation as soon as practicable after the relevant period end:

• the actual allocation of each asset type;

• the monthly or annual investment returns over at least a five-yearperiod;

• the key service providers if they have changed since the latestreport given to investors, including any change in their relatedparty status;

• annual report to investors including financial statements andauditor’s report; and

• annual reporting of the liquidity profile of the portfolio assets, thematurity profile of the liabilities, the leverage ratio and thederivative counterparties engaged by the Fund.

Monthly reports are made available providing information on theFund including:

• a review of market conditions;

• the current total net asset value of the fund and the redemptionvalue of a unit in each class of units as at the date the net assetvalue was calculated;

• net return on the Fund’s assets and strategy allocation;

• whether returns paid to investors are funded other than frominvestment returns from the fund’s assets (at this time, returns arefunded from investment returns from the fund’s assets); and

• any material change in the Fund’s risk profile, strategy orindividuals who play a key role in investment decisions.

The monthly report also includes the key service providers, if theyhave changed since the last report given to investors, including anychange in their related party status.

As the Fund invests only in the Underlying Fund, the informationcontained in these reports is disclosed against this Benchmark inrelation to both the Fund and the Underlying Fund.

The relevant reports are available on the AZ Sestante website atwww.azsestante.com or can be emailed at no cost upon request.

Yes Section 11


Summary of disclosure principles

In ASIC Regulatory Guide RG 240 Hedge funds: Improving disclosure (‘RG 240’), ASIC has developed nine principles for funds thatmeet ASIC’s definition of a ‘hedge fund’, and expects issuers of products of such funds to disclose in a Product Disclosure Statementinformation about the disclosure principles.

The following table sets out the principles set out in RG 240 and a summary of information in relation to the principles. You shouldconsider this information together with detailed explanation of the cross-referenced information set out in this PDS and the key risks ofinvesting in the Fund highlighted in section 6 of this PDS.

The information in this section about the RG 240 principles will be updated periodically. This updated information is available on ourwebsite and a paper copy will be given to you, without charge, upon request by calling Ironbark Client Services.

Principle Summary FurtherInformation

Principle 1:Investment strategy

The Investment Manager employs a top-down investment approach focusing onmacro-economic data/events and fundamental market analysis to identify anomalies, mispricedassets and shifts in economic patterns and trends as well as to anticipate price movementswithin some of the most liquid financial markets globally. This qualitative analysis can besupplemented with the use of quantitative analysis.

The Underlying Fund’s assets are allocated to different strategies, both strategic and tactical,which aim to deliver a recurrent return through diversification and to reduce concentration ofrisk.

Investments may have horizons ranging from a few days to a few months, and the share ofeach strategy in the Fund can change over time as a function of perceived market opportunitiesand changing patterns of risk-reward in the markets.

The investment strategy of the Fund is unlikely to change however investors will be providedwith 30 days’ notice should any material change occur.

Diversification guidelines and further information on investment restrictions, including keyassumptions, is set out in section 5.

All investments carry risk and different strategies can carry different levels of risks. Key risksand how they are managed are set out in section 6.

Section5,6

Principle 2:Investment manager

AZ Fund Management S.A. is the investment manager (‘Investment Manager’) of theUnderlying Fund in which the Fund invests.

The Responsible Entity reserves the right to terminate and/or replace, at its discretion, theInvestment Manager, without providing prior notice to investors in some cases. We will informinvestors of any material changes to the Fund in accordance with the law.

Section4

Principle 3:Fund structure

The Fund is an Australian domiciled, unlisted, registered managed investment scheme,registered with ASIC on 30 June 2017.

The Fund gains its investment exposure by investing into the AUD denominated class of unitsof the Underlying Fund, a Luxembourg domiciled fund managed by AZ Fund ManagementS.A..

AZ Sestante Limited is the Responsible Entity of the Fund and the issuer of units in the Fund.

AZ Fund Management S.A. is the Investment Manager of the Fund.

An Zhong (AZ) Investment Management Hong Kong Ltd has been appointed as investmentadvisor for the Underlying Fund.

KPMG has been appointed as the auditor for the Fund.

Further explanation of the entities involved in the Fund structure is detailed in section 4.

The estimated Management Cost of the Fund is 0.8956% p.a. Further information regardingfees is set out in section 7.

Risks associated with the Fund structure are discussed in section 6.

Section4,5,6,7



Principal 4:Valuation, locationand custody ofassets

For the purpose of the Fund, the Responsible Entity has appointed State Street AustraliaLimited (‘SSAL’) as the Custodian, Administrator and Unit Registry provider. SSAL has overallresponsibility for custody of the assets of the Fund, although it may appoint sub-custodiansfrom time to time.

The value of a unit in the Fund is generally determined daily on the basis of the value of theinvestments in the Fund (after taking into account any liabilities), in accordance with the Fund’sConstitution.

Generally, investments will be valued at the next available market value but other valuationmethods and policies may be applied by the Responsible Entity if appropriate or if otherwiserequired by law or applicable accounting standards.

The Fund can allocate 0%-5% in cash and 95%-100% in the Underlying Fund. There are norestrictions on asset classes or geographical location of assets in the Underlying Fund.

BNP Paribas Security Services, Luxembourg branch (’BNP Paribas’), has been appointed asUnderlying Fund Administrator. For more information regarding valuation and custodialarrangements for the Underlying Fund, refer to section 4.

Section4,5

Principle 5:Liquidity

The Fund is generally a liquid scheme. The Responsible Entity expects that under normalmarket conditions, the Fund will be able to realise at least 80% of its assets at the valueascribed in the latest calculations for the Fund’s NAV, within 10 days.

The liquidity of the Fund is determined by the liquidity of the Underlying Fund. The UnderlyingFund predominantly invests in liquid assets in accordance with the Investment Policy of theUnderlying Fund, however there may be times when the underlying investments may not bereadily sold. This is more likely in the case of investments which are not listed on a recognisedsecurities exchange or are not traded frequently. However, trading volumes of the underlyinginvestments are generally sufficient to satisfy liquidity requirements when necessary. Refer tothe liquidity risk in section 6 for further details.

The Constitution allows the Responsible Entity to make payment up to 21 days after receipt of awithdrawal request.

Further explanation of withdrawal procedures are detailed in section 10.

Section5, 6, 10

Principle 6:Leverage

The Fund does not directly borrow or use derivatives for leveraging purposes, however, theUnderlying Fund is permitted to use derivatives for leveraging purposes. The Underlying Fundgenerally aims to maintain the level of leverage at 120% with a maximum limit of 200% (gross),calculated on the total of all derivative instruments’ notional amounts.

The Underlying Fund may gain leveraged exposure directly through the use of exchangetraded and over the counter derivatives including, but not limited to, futures, options, swaps andforward contracts.

Leverage may increase the volatility of the Underlying Fund’s returns by potentially magnifyinggains or losses from the Underlying Fund’s investments. The value and liabilities associatedwith leveraged investment strategies can be more variable than traditional investments andthere may be greater exposure to possible losses. Accordingly, a leveraged fund may beregarded as having a higher risk profile than a comparable fund which has no leverage. Assetsof the Underlying Fund are used as collateral for leverage.

Section5

Principle 7:Derivatives

The Fund does not invest directly in derivatives, however, the Underlying Fund may invest inexchange-traded and over-the-counter financial derivative instruments to achieve itsinvestment objective and for the purposes of hedging against market, securities, interest rate,exchange rate, credit risk, etc; or for effective management purposes.

Risks associated with using these tools might include the value of the derivative failing to movein line with the underlying asset, potential illiquidity of the derivative and counterparty risk (thisis where the counterparty to the derivative contract cannot meet its obligation under thecontract). The aim is to keep derivative risk to a minimum by monitoring the Underlying Fund’suse of derivatives, ensuring that its obligations are met with respect to the derivative contractsand entering into derivative contracts with reputable counterparties.

Further explanation of derivatives is detailed in section 5. Risks associated with derivatives arediscussed in section 6.

Section5,6

Principle 8:Short selling

The Underlying Managers may use short selling as part of the investment strategy to benefitfrom falling security prices. The Fund itself does not engage in the short-selling of securities.

Risks associated with short selling and how short selling risk is managed are detailed insection 6.

Section5,6



Principle 9:Withdrawals

Investors of the Fund can withdraw their investment by completing either a withdrawal form(available via www.azsestante.com) or provide a written request to withdraw from the Fund.

Your proceeds will typically be made available on the 10th Business Day from the receipt ofyour valid withdrawal request.

Access to funds

Various market conditions can cause difficulties or delays in selling the Fund’s assets, or resultin a freeze of Fund withdrawals. Such circumstances can mean that it may take longer for youto receive your withdrawal proceeds. The Fund’s Constitution (‘Constitution’) allows AZSestante up to 21 Business Days after receipt of a withdrawal request to make payment. The21 Business Day period may be extended where AZ Sestante has taken all reasonable steps torealise sufficient assets to satisfy a redemption request and is unable to do so due to one ormore circumstances outside its control such as restricted or suspended trading in the marketfor an asset or where in AZ Sestante’s opinion it is in the interests of unit holders to do so.

AZ Sestante can deny a withdrawal request where accepting the request would cause the Fundto cease to be liquid or where the Fund is not liquid (as defined in the Corporations Act).

When the Fund is not liquid, an investor can only withdraw when AZ Sestante makes awithdrawal offer to investors in accordance with the Corporations Act.

AZ Sestante is not obliged to make such offers.

AZ Sestante will inform investors of any non-materially adverse change to the Fund’swithdrawal procedures and rights via AZ Sestante’s website www.azsestante.com or asotherwise required by law.

Where Indirect investors have elected to invest into the Fund via an IDPS, such as a mastertrust, wrap account or investor directed portfolio service, different terms may apply and therelevant disclosure document for that IDPS should be read. Refer to the ‘Indirect Investors’section of the ‘Important Information’ of the PDS for more information.

Section10


Management of the Sestante Global Macro Fund

AZ Sestante LimitedAZ Sestante Limited (‘AZ Sestante’) is the responsible entity(‘Responsible Entity’) of the Fund and the issuer of units in theFund. It is a wholly owned subsidiary of AZ InternationalHoldings SA.

The Responsible Entity is an Australian incorporated companylicensed to be a responsible entity, and holds an AustralianFinancial Services Licence to operate registered managedinvestment schemes.

The Responsible Entity is responsible for:

• the management of the Fund in accordance with the Fund’sConstitution (‘Constitution’), the Corporations Act and thegeneral law; and

• the appointment and the monitoring of the performance ofthe Fund’s service providers including the InvestmentManager.

AZ Fund Management S.A.Established in 1999, AZ Fund Management S.A. (‘AZ FundManagement’) is the manager with the largest number of assetsin the Azimut Holding Group.

AZ Fund Management is a Luxembourg domiciled assetmanagement company made up of professionals specialised inportfolio management, trading and risk management. Theinvestment management team comprises senior managerscovering all asset classes, a multi manager team, a team ofanalysts, a trading desk, and a risk management desk.

An Zhong (AZ) Investment Management Hong KongLtdAn Zhong (AZ) Investment Management Hong Kong Ltd (‘AnZhong’) has been appointed to provide investment advisorservices to the Underlying Fund.

An Zhong and AZ Sestante are wholly owned subsidiaries of AZInternational Holdings S.A. AZ Fund Management is controlledby Azimut Holding s.p.a.

AZ International Holdings S.A.

An Zhong and AZ Sestante are wholly owned subsidiaries of AZInternational Holdings S.A. AZ International Holdings S.A. is awholly owned subsidiary of Azimut Holding s.p.a. (that alsocontrols AZ Fund Management) and it is part of the AzimutGroup (’collectively Azimut’). Azimut manages assets for overAU$50 billion as at the date of this PDS. Azimut specialises inasset allocation and fund selection and offers financial advisoryservices to investors primarily via its advisor networks.

Azimut has been in operation since 1989 and Azimut Holdings.p.a. has been listed on the Italian stock exchange since 2004.

Ironbark Asset Management Pty Ltd

AZ Sestante has appointed Ironbark Asset Management Pty Ltd(‘Ironbark’) to provide operational services, compliance andgovernance monitoring and client services to the Fund.

Administrator, custodian and unit registry

The Responsible Entity has appointed State Street AustraliaLimited as the administrator, custodian and unit registry for theFund to provide fund administration, fund accounting, unitregistry services and to act as the custodian of the assets of theFund. AZ Fund Management S.A. has appointed BNP ParibasSecurity Services, Luxembourg branch (’BNP Paribas’) as theUnderlying Fund Administrator to provide fund administration,fund accounting and to act as the custodian of the assets of theUnderlying Fund.

Auditor

AZ Sestante has appointed KPMG as the auditor for the Fund. Inregards to the Underlying Fund, PricewaterhouseCoopers,Société Coopérative have been appointed as the auditor. Thefees of the auditor of the Fund are paid by AZ Sestante.

Details about the Sestante Global Macro Fund

The Fund is a registered managed investment scheme which isgoverned by the Constitution. The Fund comprises assets whichare acquired in accordance with the Fund’s investment strategy.

Investors receive units in the Fund when they invest. Each unitrepresents an equal interest in the assets of the Fund subject toliabilities. However, it does not give the investor an interest in anyparticular asset of the Fund.

The Responsible Entity has selected the Underlying Fund toprovide Australian investors with access to an investment vehicleand manager that would otherwise have not been available.

Investment strategy

The Fund is a global macro, absolute return fund providingaccess to a diversified range of assets by investing in theUnderlying Fund.

The Underlying Fund is actively managed to generate gains ontransactions. The Investment Manager applies a top-downinvestment approach focusing on macro-economic data andevents and fundamental market analysis to identify anomalies,mispriced assets and shifts in economic patterns and trends as

well as to anticipate price movements within some of the mostliquid financial markets globally. This qualitative analysis issupplemented with the use of quantitative analysis.

The Fund’s assets are allocated across different strategies bothstrategic and tactical aiming to deliver recurrent returns throughdiversification.

Investors in the Fund can benefit from:

• low volatility with low correlation to traditional markets:the Fund seeks to generate attractive risk-adjusted returnswith controlled volatility, in both up and down markets whiletargeting low correlation to traditional financial markets;

• a flexible investment strategy: The Fund offers anopportunity to invest in a flexible and diversified investmentstrategy. The Underlying Fund is not constrained by assetclass or geographical limits and has the flexibility to tradewhere the Manager sees opportunities at a particular point intime;

• risk management: Risk management is an essential andintegrated part of the investment process. Stringent stop


loss/gain provisions and strict volatility management aresome of the key features of the portfolio’s risk managementprocess; and

• global expertise of AZ Fund Management: The InvestmentManager has over 15 years of investment experience andunderstanding of global economics and asset pricevaluations, and are further supported by a wide network ofinvestment and research professionals within the AzimutGroup globally.

The Fund itself does not use any derivatives or short selling.However, the Underlying Fund may use derivatives and shortselling.

The investment strategy of the Fund is unlikely to change but therequired notification of 30 days would be provided to investorsshould any material change occur.

Asset allocation and diversificationThe Fund invests in the Underlying Fund. The Underlying Fundmay invest either directly or through the use of financialderivative instruments in a variety of financial instrumentsincluding equity securities, commodity index instruments, debtsecurities, convertible securities, deposits with credit institutionsand money market instruments. Issuers of these securities maybe located in any country. As a result, the Underlying Fundemploys an unconstrained, benchmark unaware strategy thathas the ability to gain exposure to various asset classes andgeographies while managing volatility.

The Underlying Fund aims to deliver investment returns,independently of the direction of the capital markets and/or themomentum of the macro economy and shifts in the businesscycles with low volatility. Through the Underlying Fund, the Fundhas exposure to long and short positions in futures on financialindices of various types including global equity securities, fixedincome, FX and commodities. The arithmetical sum of thevalues of the long and short positions in financial instrumentsand derivatives in which the Underlying Fund invests generallydoes not exceed 150% of the Underlying Fund’s NAV.

Risk managementRisk management is an integral component of the InvestmentManager’s portfolio management process. AZ FundManagement S.A.’s focus is on managing volatility, usingstringent stop loss/gain provisions and use proprietaryquantitative models to identify market positioning, direction andliquidity.

The Investment Manager’s risk management is further facilitatedby Azimut’s Risk Management Unit, an independent team whoreport to the board of directors. The unit covers market, creditand counterparty, operational and investment compliance risk.

Fund structure

The Fund is a registered managed investment scheme,governed by the Constitution. The Fund comprises assets whichare acquired in accordance with its investment strategy withinvestors receiving units when they invest.

Each unit represents an investor’s interest in the assets as awhole, subject to liabilities. However, it does not give the investoran interest in any particular asset. The value of units in the Fundis determined by reference to the assets and liabilities referableto the Fund.

AZ Sestante is the Responsible Entity of the Fund. TheResponsible Entity only has rights as a unit holder in theUnderlying Fund. The Responsible Entity has engaged anumber of professional service providers to provide a range ofinvestment, administration and back office services to the Fundincluding custody, administration services, and transactionexecution.

The Responsible Entity has entered into service agreementswith service providers and will, with the assistance of theInvestment Manager (and its service providers), regularlymonitor the performance of the service providers againstservice standards set out in the relevant agreements. Allmaterial agreements with service providers were entered into onarm’s length terms. The service providers and their relationshipto the Fund and the flow of funds are shown in the diagrambelow.

AZ Sestante reserves the right to terminate the Fund or changethe Fund’s investment objectives (including the benchmark,asset allocation, investment objectives and investment style andapproach) and/or replace the Investment Manager withoutproviding prior notice to investors in some cases. We will informinvestors of any material changes to the Fund in accordancewith the law.

For details of the key risks associated with the Fund structure,refer to section 6.

APPLICATIONMONIES

UNITSISSUED UNDERLYING FUND

$

95-100%

0-5% CASH

MANAGEMENT FEE

AZ FUND MANAGEMENT S.A.INVESTMENT MANAGER

THE FUND

MANAGEMENT FEE,PERFORMANCE FEE

AZ SESTANTE LIMITEDRESPONSIBLE ENTITY

DIRECT AND INDIRECTINVESTORS


Valuation, location and custody of assets

The Fund invests in the Underlying Fund. The ResponsibleEntity has appointed State Street Australia Limited as theAdministrator, Custodian and Unit Registry for the Fund toprovide fund administration, fund accounting, unit registryservices and to act as the custodian of the assets of the Fund.AZ Fund Management S.A. has appointed BNP Paribas SecurityServices, Luxembourg branch (’BNP Paribas’) as the UnderlyingFund Administrator to provide fund administration, fundaccounting, unit registry and to act as the custodian of theassets of the Underlying Fund.

AZ Fund Management has delegated, under its responsibilityand ultimate control, the functions of central administrationrequired by law, such as the accounting of the Underlying Fund,calculation of the net asset value of units, subscription,redemption and conversion services and registration of units tothe Underlying Fund Administrator, which also supervises thedelivery of all announcements, statements, notices and otherdocuments to unitholders of the Underlying Fund. Thisdelegation is in line with the Responsible Entity’s policy.

The Investment Manager acting on behalf of the UnderlyingFund may terminate the appointment of the Underlying FundAdministrator with written notice of ninety (90) days; theUnderlying Fund Administrator may also give up its mandate bywritten notice of ninety (90) days to the Underlying Fund. Inthese cases, a new custodian bank must be appointed toassume the duties and responsibilities of Underlying FundAdministrator, as defined by the custodian bank agreementsigned for this purpose. The replacement of the UnderlyingFund Administrator must take place within two months.

The net asset value of each unit of the Underlying Fund isestablished by the Underlying Fund Administrator, eachbusiness day.

The net asset value per Underlying Fund unit is expressed inAustralian Dollars. The net asset value per unit is obtained bydividing the net asset value of the Underlying Fund by thenumber of outstanding units of the Underlying Fund.

The valuation of assets and commitments of the UnderlyingFund is carried out by the Underlying Fund Administrator asfollows:

• The value of liquidity held in cash or in deposits, directlypayable securities and payables, advance payments,dividends, profits and/or interest due but not yet collected,are composed of the par value of the said entries, unlessit is unlikely that they will be actually received. In this case,the value is established by subtracting the amountdeemed appropriate to reflect the real value of the assets;

• The valuation of transferable securities and money marketinstruments listed or traded on the stock market or otherregulated market which operates regularly, is recognisedand open to the public, is based on the price on the lastbusiness day (‘Underlying Fund Valuation Date’) prior tothe Underlying Fund valuation day. If a transferablesecurity or money market instrument is traded on morethan one market, the valuation is based on the last knownprice on the Underlying Fund Valuation Date of the mainmarket of the said security or instrument. If the last knownprice on the Underlying Fund Valuation Date is notrepresentative, the valuation is based on the likely netbreakup value, prudentially estimated in good faith;

• Transferable securities and money market instruments notlisted or traded on a regulated market which operatesregularly, are recognised and open to the public, arevalued based on the likely net breakup value, prudentiallyestimated in good faith;

• Futures and options are valued based on closure prices onthe relative market the previous day. The prices used areliquidation prices on futures markets;

• Units of Undertakings for Collective Investment inTransferable Securities (‘UCITS’) are valued based on thelast net asset value available;

• Swaps are valued at their fair value based on the lastknown closure price of the underlying security. Futurescontracts are valued based on closure prices on therespective market the previous day. The InvestmentManager may use different valuation criteria based on theaverage price of the same previous day for UnderlyingFund valued on a monthly basis and under certain marketconditions;

• Assets expressed in a currency other than AustralianDollars, the base currency of the Underlying Fund, will beconverted at the last available exchange rate. All otherassets shall be valued based on the likely net breakupvalue, which must be estimated with due care and in goodfaith.

The Investment Manager is authorised to use any othergenerally accepted valuation criteria deemed appropriate for theUnderlying Fund’s assets, in the event that it is impossible orinappropriate to use the valuation methods considered abovedue to special or exceptional circumstances or events, in orderto obtain a fair value of the Underlying Fund’s assets.

AZ Fund Management will hold sufficient liquid assets or cash tohedge the expenses borne by the Underlying Fund. Off-balancesheet expenses will also be considered, according to fair andprudential criteria.

LiquidityThe Responsible Entity currently expects to be able to realise atleast 80% of its assets at the value ascribed to those assets incalculating the Fund’s NAV within 10 days.

The Responsible Entity does not guarantee that the Fund willremain liquid. The liquidity of the Fund is determined by theliquidity of the Underlying Fund. Circumstances associated withthe Underlying Fund and the underlying investments in whichthe Underlying Fund is invested, may mean that there are timeswhen the underlying investments may not be readily sold andthe Fund could be illiquid.

AZ Fund Management monitors the redemption frequency,lockup periods and notification guidelines for redemptions whichare aggregated to provide an ongoing measure of a portfolio’sliquidity. AZ Fund Management S.A. seeks to monitor theliquidity of the portfolio of the underlying investments of theUnderlying Fund.

Short sellingThe Fund itself does not engage in the short-selling ofsecurities, however the Underlying Manager may borrow or lendsecurities as part of its investment strategies. This investmenttechnique is referred to as short selling. The Underlying


Manager may engage in short-selling if it believes assets aremispriced or for hedging purposes.

Short selling occurs when the Underlying Manager ‘borrows’ ashare from a securities lender and sells it on the share market(known as a short position). When the borrowed shares arereturned to the lender, it will buy the share from the sharemarket. If the share has dropped in price, the UnderlyingManager will benefit, as it buys the share at a lower price than itsold it. If the share price has risen, the Underlying Manager willhave to buy the share at a higher price than it sold it, therebymaking a loss. Short positions on particular stocks are takenwhen it is expected that these stocks will fall in price.

The Underlying Fund limits the arithmetical sum of the values ofthe long and short positions in financial instruments andderivatives in which the Underlying Fund can invest to 150% ofthe Underlying Fund’s NAV.

Refer to Section 6 of the PDS for further information in relationto short selling risk.

Leverage

Leverage will not be used directly by the Fund to generatereturns. The Fund does not directly borrow or use derivatives forleveraging purposes, however, the Underlying Fund is permittedto use derivatives for leveraging purposes. The Underlying Fundgenerally aims to maintain the level of leverage at 120% with amaximum limit of 200% (gross), calculated on the total of allderivative instruments’ notional amounts.

The Underlying Fund may gain leveraged exposure directlythrough the use of exchange traded and over the counterderivatives including, but not limited to futures, options, swapsand forward contracts.

The Underlying Fund will generally not borrow in excess of 10%of the total assets of the Underlying Fund, any such borrowing istypically through a financial institution provided on a temporarybasis. However, the Underlying Fund may acquire foreigncurrency by means of a back-to-back loan. The Underlying Fundwill generally use the types of leverage described however hasthe discretion to use other types as required.

In relation to the purchases and sale transactions that thebrokers will settle for the Underlying Fund, the brokers mayprovide financing to the Underlying Fund and may hold assetsand cash on behalf of the Underlying Fund in connection withsuch settlement and financing transactions. As security for thepayment and performance of its obligations and liabilities to thebrokers, the Underlying Fund will advance to the brokers,collateral in the form of securities or cash.

Leverage may increase the volatility of the Underlying Fund’sreturns by potentially magnifying gains and losses from theUnderlying Fund’s investments. The value and liabilitiesassociated with leveraged investment strategies can be morevariable than traditional investments and there may be greaterexposure to possible losses. Accordingly, a leveraged fund maybe regarded as having a higher risk profile than a comparablefund which has no leverage.

As an example, assuming that an Underlying Manager has $1 ofcapital, borrows $1 and invests the full $2 in a portfolio of stocks(i.e. the Underlying Manager is long $2). At the same time, theUnderlying Manager sells short $1 of stocks (i.e. the UnderlyingManager is short $1).

Gross Leverage = (Long position + Short position) / Net AssetValue

Gross Market exposure = ($2 + $1) / $1 = 300%

Net Leverage = (Long position – Short position) / Net AssetValue

Net Market exposure = ($2 - $1) / $1 = 100%

Please note that the above examples have been provided forreference purposes only. Any assumptions underlying theseexamples are hypothetical only.

Derivatives

The Fund does not directly invest in derivatives. However, theUnderlying Fund may use derivatives:

• to hedge against market, securities, interest rates, exchangerates, credit risk, etc;

• efficient portfolio management; and

• for investment purposes.

The Underlying Fund may invest in financial derivativeinstruments that include, but are not limited to, financial futurescontracts, options (on equities, interest rates, indices, bonds,currencies, commodity indices or other instruments), forwardcontracts (including foreign exchange contracts), swaps(including total return swaps, foreign exchange swaps,commodity index swaps, interest rate swaps, and swaps onbaskets of equities, volatility swaps and variance swaps),contracts for different credit derivatives (including credit defaultderivatives, credit default swaps and credit spread derivatives),warrants, and structured financial derivative instruments such ascredit-linked and equity-linked securities. These derivatives maybe over-the-counter (‘OTC’) or exchange traded derivatives. TheUnderlying Fund will generally use the types of derivativesdescribed however has the discretion to use other types ofderivatives as required. The Investment Manager generally doesnot disclose the identities of the counterparties to theResponsible Entity.

The Underlying Fund will only enter into transactions withcounterparties which is deemed to be creditworthy. Approvedcounterparties will typically have a public rating of A- or above.Counterparties will comply with prudential rules considered bythe Commission de Surveillance du Secteur Financier (’CSSF’)as equivalent to European Union prudential rules. Thecounterparty does not have discretion over the composition ormanagement of the Underlying Fund’s portfolio or over theunderlying financial derivative instruments used by theUnderlying Fund. The Underlying Fund will generally only enterinto derivative contracts with a small number of counterpartiesbut this may change from time to time.

For further details regarding the risks of derivative use, refer tosection 6.

Distributions

The Fund may distribute income (if any) annually. Distributionsare usually calculated on the last day of each accounting periodending 30 June, and are normally paid to investors within30 days of the period end, although the Constitution allows up to2 months from the end of the relevant distribution period.Subject to the law, AZ Sestante may amend the distributionfrequency without notice.

An investor’s share of any distributable income is calculated inaccordance with the Constitution and is generally based on thenumber of units held by the investor at the end of the distributionperiod and the distributable income.

Investors can have their distribution reinvested or paid to anominated bank account. Investors who do not indicate apreference will have their distributions automatically reinvested.


In some circumstances, such as where an investor makes alarge withdrawal request or application request (5% or more ofthe units on issue at the date the request was received), AZSestante may determine that a special distribution be calculatedand distributed earlier than usual in order to: (1) in the event ofan application, prevent dilution of distributable income to theexisting unit holders; and (2) in the event of a withdrawal, ensurethe redeeming investor receives their share of distributable

income so the remaining investors are not left to bear theredeeming investor’s portion of taxable income. There may alsobe a special attribution of taxable components to redeemingInvestors under the AMIT regime.

Indirect Investors should review their IDPS guide for informationon how and when they receive any income distribution.

Risks of investing in the fund

All investments carry risk. Different investment strategies maycarry different levels of risk, depending on the assets acquiredunder the strategy. Assets with the highest long-term returnsmay also carry the highest level of short-term risk. Highlightedbelow are some of the significant risks you should considerwhen deciding whether to invest in the Fund. You may want toconsider these risks in light of your risk profile. Your risk profilewill vary depending on a range of factors, including your age, theinvestment time frame (how long you wish to invest for), yourother investments or assets and your risk tolerance.

We do not guarantee the liquidity of the Fund’s investments,repayment of capital or any rate of return or the Fund’s

investment performance. The value of the Fund’s investmentswill vary. You may lose money by investing in the Fund and yourinvestment in the Fund may not meet your objectives. The levelof returns will vary and future returns may differ from pastreturns. Laws affecting managed investment schemes may alsochange in the future.

In addition, we do not offer advice that takes into account yourpersonal financial situation, including advice about whether theFund is suitable for your circumstances. If you require personalfinancial advice, you should contact a licensed financial adviser.

Risks relevant to the Sestante Global Macro Fund

Capital risk The value of units in the Fund may rise or fall depending upon a number of factors including the value ofinvestments made by the Fund. There is no guarantee of repayment of any or all of your capital invested.

Conflicts of interestrisk

The Responsible Entity, Investment Manager and the Investment Advisor may act in a similar capacity to,or be involved in other funds which may have similar investment objectives, leading to conflicting demandsin allocating management time, services and other functions.

Counterparty risk The Investment Manager may engage in a variety of transactions such as futures contracts, forwardcontracts, over-the-counter transactions and structured transactions, that could expose the Fund to risksrelated to the counterparties in such transactions. Such risks include the risk that the counterparty may beunable to perform with respect to the transaction, whether due to credit or liquidity issues, insolvency,bankruptcy, governmental prohibition or other causes.

Credit facilities risk If the Underlying Fund undertakes any short-term borrowings as permitted by its constitution, the Fundmay be subject to a greater risk of loss than if the Underlying Fund did not utilise such credit facilities.

Currency risk The Fund invests in overseas markets and has exposure to movements in the currencies concerned.There is a risk that changes in global currency rates will adversely affect the value of the Fund.

Derivative risk Derivatives are financial instruments that are used to obtain or reduce market exposure. They canpotentially create leveraged positions, where exposure is obtained that is greater than the value of assetsrequired to support them. The Fund is not permitted to invest in derivatives, however may have exposureto derivatives through the Underlying Fund. The Underlying Fund will generally only enter into derivativescontracts with a small number of counterparties but this may change from time to time. The value ofderivatives can be influenced by a number of factors, including movement in the value of the underlyingassets, difficulty in liquidating the derivative and counterparty risk (this is where the counterparty to thederivatives contract cannot meet its obligations under the contract).

Fund risk Fund risks include the potential termination of the Fund, change of the fees and expenses (in accordancewith the Fund’s Constitution), change in the Investment Manager or investment professionals of theInvestment Manager, or the risk of error in the administration of the Fund. The Responsible Entity’s rightsin relation to the Underlying Fund are limited to its rights as a unitholder in that Fund.

There is also a risk that investing in the Fund may give different results than investing individually becauseof income or capital gains accrued in the Fund and the consequences of applications and withdrawals byother investors. AZ Sestante aim to manage fund risk by regularly monitoring the Investment Manager andthe investment management process to ensure they are acting in your best interests.

Fund of Fund risk The Fund invests in a fund of alternative investments and is subject to certain risks associated with aninvestment in alternative investments. These risks may include, but are not limited to, higher fees thaninvesting directly in the Underlying Fund, the use of derivative instruments and leverage, reliance on keypersonnel, the unregulated nature of alternative investments, broad investment strategies, investments inemerging markets and lack of liquidity and volatility in the underlying investments of the alternativeinvestments.


Key service providerrisk

The Fund and the Underlying Fund rely on service providers to administer and manage the investments ofthe Fund and the Underlying Fund in accordance with their obligations under the service agreement.There is a risk that such service providers may breach their obligations or terminate the agreement, whichmay adversely impact the Fund or the Underlying Fund. AZ Sestante and AZ Fund Management S.A.(either themselves or by engaging other service providers) monitor and undertake risk management of theservice providers to ensure that these occurrences are minimised to the extent possible.

Liquidity risk This is the risk that investments may not be able to be realised quickly for their market value. The liquidityof the Fund is dependent on the liquidity of the underlying assets of the Fund.

Market risk There is a risk that the market value of the Fund’s and/or Underlying Fund’s assets will fluctuate. This mayoccur as a result of factors such as economic conditions, government regulations, market sentiment, localand international political events, environmental and technological issues.

Operational risk Disruptions or failure of information technology systems, administrative procedures or operationalcontrols may directly or indirectly impact the operation of the Fund.

Where appropriate, processes and controls are in place to reduce the impact of potential operational risks,and these are reviewed and tested on an ongoing basis.

Short selling risk Selling securities short involves borrowing stock and selling these borrowed securities. Short sellinginvolves a higher level of risk than buying a security. This is because when a security is bought, themaximum loss is limited to the amount invested. With short selling, there is no limit on the maximum lossbecause there is no upper limit on a security’s price. Unless action is taken, losses will continue to increaseas the security’s price rises. Borrowed securities may also be unexpectedly recalled at a time when theycannot be bought back without substantial losses being incurred.

Fees and other costs

DID YOU KNOW?

Small differences in both investment performance and fees and costs can have a substantial impact on your long termreturns.

For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return byup to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000).

You should consider whether features such as superior investment performance or the provision of better memberservices justify higher fees and costs.

You may be able to negotiate to pay lower contribution fees and management costs, where applicable. Ask the fund oryour financial adviser.

TO FIND OUT MORE

If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities andInvestments Commission (ASIC) website (www.moneysmart.gov.au) has a managed funds fee calculator to help you check outdifferent fee options.

This document shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, fromthe returns on your investment or from the assets of the managed investment scheme as a whole. Taxes are set out in section 8 of thisPDS.

You should read all the information about fees and costs because it is important to understand their impact on your investment.

Sestante Global Macro Fund

Type of fee or cost1,2,3 Amount How and when paid

Fees when your money moves in or out of the Fund

Establishment fee: The fee to open yourinvestment.

Nil Not applicable

Contribution fee: The fee on eachamount contributed to your investment.

Nil Not applicable

Withdrawal fee: The fee on eachamount you take out of your investment.

Nil Not applicable

Exit fee: The fee to close yourinvestment.

Nil Not applicable


Sestante Global Macro Fund

Management costs

The fees and costs for managing yourinvestment

Estimated to be 0.8956% of the NAV ofthe Fund.

Consisting of:

Management fee4: 0.4100% p.a. of theNAV of the Fund

Calculated and accrued daily andreflected in the unit price. The fee is paidmonthly in arrears from the assets of theFund.

Expense recovery: Estimated to be nilof the NAV of the Fund

Calculated and accrued daily andreflected in the unit price. Theseexpenses are paid when the amounts aredue from the assets of the Fund.

Performance fee5: 10% of thepercentage increase in net asset value(’NAV’) after ongoing fees are deducted(adjusted for the issuance andwithdrawals of units and distributions) inexcess of the RBA Cash Rate plus 2%p.a. and provided the Fund’s total returnis above 0% and the previous High WaterMark has been exceeded. The Fund’sconstitution refers to this fee as theIncentive Fee.

Estimated to be 0.0356% p.a. of the NAVof the Fund

Calculated and accrued daily and paidfrom the assets of the Fund after 30 Juneand 31 December each year in arrears.The performance fee is reflected in theunit price.

Indirect costs: 0.4500% p.a. Indirect costs are variable and arededucted from the income and assets ofthe Fund and are reflected in the unitprice.

Services fees

Switching fee: The fee for changinginvestment options.

Nil Not applicable

1 Unless otherwise stated, all fees quoted in this PDS are quoted on a GST inclusive basis, net of any reduced input tax credits and includes anyapplicable stamp duty.

2 Service fees and transaction costs may also apply. For more detail refer to the ‘Transaction: buy/sell spread’ section below under the heading‘Additional explanation of fees and costs’.

3 The fees and costs in this table do not include fees that may be payable to your financial adviser. Refer to the Statement of Advice provided by yourfinancial adviser in which the details of these fees are set out.

4 The management fee can be negotiated with Wholesale Clients as defined under the Corporations Act.5 The performance fee is an estimate as at the date of this PDS and can vary from year to year. For more detail refer to the ’Additional explanation of

fees and costs’below.

Additional explanation of fees and costs

Management costs

The management costs of the Fund as set out in this PDS iscomprised of: the management fee and (if any) theperformance fee, the expense recovery, and indirect costs inrelation to the Fund. The management costs as at the date ofthis PDS are an estimate of 0.8956% p.a. of the NAV of theFund.

Management fee

The management fee is a fee payable under the Constitution forthe management of the Fund. The management fee iscalculated and accrued daily based on the NAV of the Fund andis reflected in the unit price. It is paid monthly in arrears from theassets of the Fund.

The Constitution permits a maximum management fee of 3%p.a. of the NAV of the Fund. The Responsible Entity mayincrease the management fee up to this maximum amount atany time subject to the Corporations Act.

Expense recovery

Under the Constitution, the Responsible Entity is entitled to bereimbursed out of the assets of the Fund for all expensesincurred in the operation of the Fund. These include day to dayexpenses such as administration and abnormal expenses suchas legal costs of any proceedings involving the Fund.

However we have chosen not to be reimbursed for theseamounts and as at the date of this PDS, all expenses of theFund are covered by the management fees at no additionalcharge to you. However in future, if expenses are charged to theFund, we will provide you with 30 days’ prior notice.


Performance fee

A performance fee is charged by the Responsible Entity whenthe Fund exceeds certain performance criteria. Performancefees form part of the management costs for the Fund.

The performance fee is 10% of the excess investment return(net of all fees, including performance fee) by which the Fundoutperforms the RBA Cash Rate plus 2% and provided specifiedhurdles are met during the performance fee calculation period,including:

• the Fund’s total return is above 0%;

• the Fund outperforms the RBA Cash Rate plus 2% (net of allfees, including performance fee); and

• the previous High Water Mark has been exceeded.

The High Water Mark means no performance fee is payable fora calculation period where at the end of that calculation periodthe unit price on an accumulation basis (i.e. with distributionsreinvested, but no performance fees deducted) is lower than theprevious highest unit price at which a performance fee was paid,calculated on the same basis at the end of any calculationperiod. Calculation periods end at 30 June and 31 Decembereach year.

Before a performance fee can be paid, the above conditionsmust be met.

As the future performance of the Fund is not known, the amountand impact of any performance fee on investors’ likely returnscannot be predicted and it can be higher or lower than theestimate stated. As at the date of this PDS, the performance feeis estimated to be 0.0356% p.a.

Indirect costs

In general, indirect costs are any amounts that directly orindirectly reduce the returns on the Fund that are paid from theincome or assets of the Fund. Indirect costs are reflected in theunit price of your investment in the Fund.

The indirect costs in the fees and costs table of this PDS areestimates, and as at the date of this PDS, the estimated costbased on the financial year ending 30 June 2018 is 0.4500% p.a.of the NAV of the Fund (for every $50,000 you have in the Fund,you will pay an estimate of $225 in indirect costs each year). Theindirect costs may vary from year to year, including to the extentthat they rely on estimates.

Included in the indirect costs are the indirect underlyingmanagement costs and indirect underlying managerperformance related fees of the Underlying Fund.

• Indirect underlying management costs: The InvestmentManager will typically charge management fees and thesefees are deducted from the Underlying Fund and the impactis included as part of the Underlying Fund’s unit price.

• Indirect performance related fees: The InvestmentManager of the Underlying Fund may receive performancerelated fees and if they apply they will reduce the unit price ofthe Underlying Fund. These indirect performance relatedfees will be an indirect cost to you. At the date of this PDS,the Underlying Fund does not charge a performance fee.

Transactional and operational costsThe Fund may incur transactional and operational costs such asbrokerage, settlement costs, clearing costs and costs ofderivatives entered into for hedging purposes. Transaction costsmay be incurred in the day-to-day management of the Fund’sinvestment portfolio, and when investors enter or exit the Fund.

Transactional and operational costs incurred as a result of unitholders coming into and going out of the Fund may be recoveredby way of the buy/sell spread charged to investors. Such costsare recovered as they are incurred and reflected in the unit price.

Transactional and operational costs not recovered from thebuy/sell spread are additional costs to unit holders that arededucted from the assets of the Fund.

The transactional and operational costs are estimates. As at thedate of this PDS, the estimated transactional and operationalcosts (net of the recovered buy/sell spread) are 0.5000% p.a.(for every $50,000 you have in the Fund, you will pay anestimate of $250 in transactional and operational costs eachyear).

Transactional and operational costs may vary as the turnover inthe underlying assets may change substantially as investmentand market conditions change that may affect the level oftransactional and operational costs not covered in the buy/sellspread. Further, there are highly variable drivers upon whichsuch transactional and operational costs are dependent.

Transaction costs: buy/sell spread

The buy/sell spread reflects the estimated costs incurred inbuying or selling assets of the Fund when investors invest in orwithdraw from the Fund. This aims to ensure other investors donot bear the transaction costs associated with a particularinvestor buying or selling units in the Fund. The buy/sell spreadis an additional cost to you but is incorporated into the unit priceand incurred when you invest in or withdraw from the Fund andis not separately charged to you. The buy/sell spread is paid intothe Fund and not paid to the Responsible Entity or InvestmentManager. The buy/sell spread is 0% upon entry ($0) and 0%upon exit ($0), GST is not applicable. We may vary the buy/sellspread from time to time and prior notice will not ordinarily beprovided, unless it is materially adverse to investors. Updatedinformation on the buy/sell spread will be posted online atwww.azsestante.com. Reinvested distributions do not incur abuy/sell spread.

Bank and government chargesIn addition to the fees set out in this section, standardgovernment fees, duties and bank charges may also apply toinvestments and withdrawals (including dishonour fees and bankcharges) and may be payable by the investor.

Goods and services taxAll fees are shown inclusive of the net effect of Goods andServices Tax net of reduced input tax credit unless otherwisestated.

Further information on GST is available in section 8.

Changes to feesThe Responsible Entity may increase or decrease the fees for anumber of reasons without investor consent, subject to themaximum fee amounts specified in the Constitution. We willprovide investors at least 30 days’ prior notice of any proposedfee increase in accordance with the law. Expense recoveries andbuy/sell spreads may change without notice, for example, whenit is necessary to protect the interests of existing investors and ifpermitted by law. In most circumstances the Constitution definesthe maximum fees that can be charged for fees described in thisPDS.

Contribution fee: The Fund’s constitution allows a maximumcontribution fee of up to 2% of each amount invested (alsoknown as an entry fee). No contribution fee is currently charged.Withdrawal fee: The Fund’s constitution allows a maximum


withdrawal fee of up to 2% of the withdrawal price. Nowithdrawal fee is currently charged.

Differential feesWe may negotiate different fee arrangements, such as feerebates, waivers or reductions, with Wholesale Clients. Sucharrangements would be subject to individual negotiation and

compliance with the legal and regulatory requirements. ContactAZ Sestante for details on 1800 034 402.

Example of annual fees and costs for the FundThis table gives an example of how the fees and costs for this managed investment product can affect your investment over a 1 yearperiod. You should use this table to compare this product with other managed investment products.

EXAMPLE - Sestante Global MacroFund

BALANCE OF $50,000 WITH ACONTRIBUTION OF $5,000 DURINGYEAR

Contribution fees Nil For every additional $5,000 you put inyou will be charged $0.

PLUS Management costs 0.8956% p.a. And, for every $50,000 you have in theFund you will be charged $448 each year.

EQUALS Cost of Fund If you had an investment of $50,000 atthe beginning of the year and you put inan additional $5,000 during that year, youwould be charged fees of: $4481,2

What it costs you will depend on theinvestment option you choose and thefees you negotiate.

1 Additional fees may apply. Please note that this example does not capture all the fees and costs that may apply to you such as the buy/sell spread.2 This example assumes that the additional $5,000 was invested at the end of the year. The actual management cost will depend on when the

additional $5,000 is contributed.

Please note that this is just an example. In practice, yourinvestment balance will vary, as will the related managementcosts.

ASIC provides a fees calculator on its ‘moneysmart’ website thatyou could use to calculate the effects of fees and costs on yourinvestment in the Fund.

Warning: Additional fees may be paid to a financial adviser if afinancial adviser is consulted, refer to the Statement of Adviceprovided by the financial adviser in which details of the fees areset out.

Taxation

This section provides general information only on selectedAustralian income tax matters and is only applicable toAustralian resident investors in the Fund that hold their units oncapital account. The tax comments in this section do not takeinto account the specific circumstances of the investor. Inparticular, they may not be relevant to investors that are subjectto special tax rules such as banks, insurance companies,managed investment trusts, tax exempt organisations anddealers in securities.

Warning: Ironbark cannot give tax advice in respect ofinvestments in the Fund. Investing in a registered managedinvestment scheme (such as this Fund) is likely to have taxconsequences. Australian tax laws are complex and subject tochange. The tax comments below are only in respect ofAustralian income tax and are based on the current law inAustralia as at the date of this PDS. The comments do not takeinto account any changes in the tax law or future judicialprecedents of the law after this time. Investors are stronglyadvised to seek their own professional tax advice about theapplicable Australian tax (including income tax, GST and duty)consequences and, if appropriate, foreign tax consequences

that may apply to investors based on their particularcircumstances before investing in the Fund.

Taxation of the FundThe Fund should be characterised as a resident trust estate forAustralian income tax purposes. The Responsible Entity of theFund should not be subject to tax on the net (tax) income of theFund for the relevant year. Rather, the investors in the Fund aregenerally assessed on their share of the net (tax) income of theFund for the relevant year.

Taxation of Australian resident investors

DistributionsThe whole of the Fund’s distributable income (if any) for aparticular income year ended 30 June will generally bedistributed to investors in respect of the relevant income year.Investors should include their share of the net (tax) income ofthe Fund in their assessable income in the relevant income year.This share is determined based on the distribution of thedifferent income characters by the Fund to the investors. This isthe case even if the Fund does not pay a cash distribution, the


distribution is reinvested in additional units in the Fund, thedistribution is paid in the next income year, or where the incomedistributions differ to the net (tax) income of the Fund.

Effective from 30 June 2018, we elected for the Fund to be anattribution managed investment trust (AMIT) under the AMITregime introduced by the Government in 2016. From that time,the basis upon which an investor in the Fund may be subject totax may differ to that set out above. Investors will be taxed on anattribution basis (having regard to the amount and character ofthe net taxable income of the Fund that we “attribute” to aninvestor), rather than such tax being based strictly on the shareof the net income distributed to which an investor is “presentlyentitled”. The attribution will be made on a fair and reasonablebasis in accordance with the Constitution.

Through the AMIT regime there should be greater certainty ofthe taxation position of investors. In particular, it is noted thatunder the AMIT regime:

• The net (tax) income of the Fund for an income year will beattributed to investors in the Fund each year, based on theirentitlement as defined in the Constitution and this PDS.

• The amounts attributed to investors from the Fund each yearwill be disclosed in an AMIT Member Annual Statement(AMMA Statement). This statement will be provided toinvestors no later than three months after the end of therelevant income year.

• The amounts attributed to investors from the Fund asdisclosed in the AMMA Statement should be taken intoaccount in the taxable income calculation of investors for therelevant year of income.

• The amounts attributed to investors from the Fund shouldretain the character they had in the Fund for income taxpurposes.

• Investors can rely on specific legislative provisions that allowfor an adjustment in calculating the net (tax) income of theFund for an income year to be carried forward and dealt within the year that the adjustment is discovered.

• Investors will be subject to a tax cost base adjustmentmechanism that may result in increases or decreases to thetax cost base of units held in the Fund, where there is adifference between the amount distributed by the Fund andthe taxable amounts attributed to investors for an incomeyear. Details of these tax cost base adjustments will beshown in the AMMA Statement.

• Australian withholding tax, if applicable, will be levied on theamounts attributed to a non-resident from the Fund, whichmay be different to the cash that is actually distributed by theFund for the year.

• An amount of net (tax) income may be attributed to Investorsby the Fund at the time of any withdrawal or cancellation ofunits in the Fund. This will be based on any entitlement to theFund’s income specified in the Constitution and this PDS.

In respect of each income year for which investors receive adistribution from the Fund, we will send an AMMA Statement ora tax statement that will indicate the composition of thedistributions the investor has received from the Fund that mayinclude discount capital gains, non-discount capital gains,Australian source interest and other income, assessable foreignsource income, foreign income tax offsets, CGT concession,and other non-assessable amounts.

The capital gains distributed to an investor can be offset by theinvestor’s capital losses arising from other sources. If the capitalgains relate to assets held by the Fund for at least 12 monthsbefore the disposal and the investor is an individual, trustee or

complying superannuation fund, the investor may be entitled toreduce the capital gain by applying the discount capital gains taxconcession, after the application of any capital losses. Theconcession is 50% for an Australian resident individual or trust,and 33.33% for a complying superannuation fund. In the AMMAStatement or annual tax statement, we will advise of capitalgains that arise from investments the Fund has held to assist theinvestor in calculating their net capital gain the relevant year.

To the extent that part of a capital gain to which an investorbecomes entitled is not assessable as a result of the discountcapital gains tax concession, no adjustment to the cost base oftheir units will be required.

You may receive other non-assessable distributions from theFund. Such distributions should reduce the tax cost base of theunits of the investor in the Fund on which the distribution ismade. Further, where the tax cost base is reduced to nil, theamount by which the non-assessable component exceeds thetax cost base of the unit will be regarded as a discountablecapital gain made by the investor that holds the unit.

In the case where the Fund makes a loss for tax purposes for aparticular income year ended 30 June, the Fund cannotdistribute the tax loss to investors. However, subject to the Fundsatisfying the relevant loss utilisation rules, the loss may becarried forward and applied by the Fund against its income infuture income years.

Foreign income tax offsetWhere the Fund pays foreign tax (such as withholding taxes) inrespect of income or gains from a foreign investment, aninvestor may be entitled to receive a foreign income tax offset(‘FITO’). Investors will usually include the foreign income and theFITO in their assessable income and may be eligible for a taxoffset. The amount of any foreign income and FITO will bedetailed in the AMMA Statement or annual tax statementprovided to an investor.

The imposition of tax by a foreign jurisdiction will depend on thecountry in which the asset is located and income is sourced andthe terms of any international tax agreement that exists betweenthat country and Australia, if any. These considerations mayaffect an investor’s entitlement to a FITO.

Controlled Foreign Company IncomeThe Controlled Foreign Company (‘CFC’) rules can attributeincome to the Fund that has been derived but not distributed by aforeign company where, in broad terms, the Fund together withits associates control the foreign company. It is unlikely for theserules to apply on the basis that the Fund should not control anyforeign company.

Disposal or withdrawal of unitsThe disposal or withdrawal by an investor of any unit in the Fundmay give rise to a capital gain or capital loss that is included inthe net capital gain calculation of that investor for the relevantincome year. Australian income tax may be payable on any netcapital gain that is made for the relevant income year. A capitalgain would be made where the capital proceeds from thedisposal or withdrawal exceeds the cost base of the relevantunit. A capital loss would be made from the disposal orwithdrawal where the capital proceeds from the disposal orwithdrawal of the unit are less than the reduced cost base of theunit.

In order to determine their capital gain or capital loss positionfrom the disposal or withdrawal of any unit, investors will need toadjust the tax cost base of each unit in the Fund for anynon-assessable components that have been received from theFund on that unit. Other cost base adjustments may also be


required pursuant to the AMIT regime. Note, a discount may beavailable for certain investors in calculating their net capital gain.Such a discount is available on capital gains made on units inthe Fund (after the application of capital losses) where the unitshave been held for at least 12 months. The discount is 50% forAustralian resident individuals and trusts, and 33.33% forcomplying superannuation funds.

Taxation of non-resident investorsIf you are not an Australian resident for tax purposes, or if youprovide us with an address outside Australia, tax may bewithheld from some Australian sourced taxable components ofdistributions that are made or attributed by the Fund tonon-residents. The rate of withholding tax is dependent on thecharacter of the distribution. If the nature of the distribution isregarded as Australian sourced interest, the withholding tax ratewill be 10%. If the Fund is a withholding managed investmenttrust and the distribution is a fund payment, the withholding taxrate will be 15% if the investor is resident in an exchange ofinformation country, or otherwise 30%. Any non-assessabledistributions made by the Fund should not be subject toAustralian withholding tax. You may be subject to the tax laws inyour country of residence and should obtain professional taxadvice before investing in the Fund.

GSTGST will apply to most expenses of the Fund. All stated fees andexpenses are quoted on a GST inclusive basis less any reducedinput tax credits available to the Fund. Generally, the Fundcannot claim full input tax credits for GST incurred on expenses,but the Fund may be entitled to reduced input tax credits of 55%to 75% of any GST paid in respect of some of these expenses.

Tax File Number declarationOn your application form you may provide us with your Tax FileNumber (‘TFN’) or advise us in writing of your TFN exemption.Alternatively, if you are investing in the funds in the course orfurtherance of an enterprise, you may quote an AustralianBusiness Number (‘ABN’).

It is not compulsory for you to quote a TFN, exemption or ABN,but if you do not we are required by law to deduct tax from anytaxable income distribution payable to you at the highestmarginal tax rate plus Medicare Levy and any other applicableGovernment charges. We are authorised to collect TFNs undertax law. For more information about TFNs, please contact theAustralian Tax Office.

US tax law requirements

The Fund is a Reporting Financial Institution under theInter-Governmental Agreement between the Australian and USgovernments in relation to the Foreign Account Tax ComplianceAct (‘FATCA’), a United States tax law that imposes certain duediligence and reporting obligations on foreign (non-US) financialinstitutions and other financial intermediaries, including theFund, to prevent tax evasion by US citizens and US tax residents(‘US Persons’) through the use of non-US domiciledinvestments or accounts.

To comply with the requirements under this Act, we will collectcertain additional information from investors and will be requiredto disclose such information to the ATO. The ATO will shareinformation reported to it by Reporting Financial Institutions withthe US Internal Revenue Service.

For further information in relation to how our due diligence andreporting obligations may affect you, please consult your taxadviser.

Common reporting standard

The Fund is a Reporting Financial Institution under the Tax LawsAmendment (Implementation of the Common ReportingStandard) Act 2016 that implemented the OECD CommonReporting Standard (‘CRS’) in Australia, requiring ReportingFinancial Institutions in Australia to report to the ATO details oftheir foreign investors from participating jurisdictions (othercountries that have implemented CRS).

To comply with CRS, we are required to collect information fromyou to identify if you are a tax resident of any otherjurisdiction(s). For non-individual accounts, we are also requiredto identify the entity type and whether any controlling personsare foreign tax residents. Processing of applications orwithdrawals will be delayed or refused if you do not provide therequired information when requested. Penalties can apply ifinvestors provide false information.

The ATO will share information reported to it by ReportingFinancial Institutions to tax authorities of jurisdictions that havesigned the CRS Competent Authority Agreement.

For further information in relation to how our due diligence andreporting obligations may affect you, please consult your taxadviser.

How to apply

Applying for unitsInvestors can acquire units by completing an application form(‘Application Form’). The minimum investment amount for theFund is $20,000.

The price at which units are acquired is determined inaccordance with the Constitution (‘Application Price’). TheApplication Price on a Business Day is equal to the NAV of theFund, divided by the number of units on issue and adjusted forthe buy/sell spread.

The Application Price will vary as the market value of assets inthe Fund rises or falls.

How to apply

To invest in the Fund, complete the Application Formaccompanying this PDS and either;

• attach your cheque payable to ‘Apps A/C <name ofinvestor>’, or

• make payment by direct deposit (see details on theApplication Form),


and send your Application Form to:

AZ Sestante LimitedC/- State Street Australia Limited - Unit RegistryLevel 14, 420 George StreetSydney NSW 2000

Please note that cash cannot be accepted.

Who can invest?

Investors can be individuals, joint investors, trusts, clubs andassociations, partnerships and companies or the trustee(s) of aself managed superannuation fund. Applicants who areindividuals must be 18 years of age or over.

Investors investing through an IDPS should use the ApplicationForm provided by the operator of the IDPS.

Application cut-off times

If a correctly completed Application Form, identificationdocuments (if applicable) and cleared application money isreceived:

• before or on 2.00pm on a Business Day, the application willbe processed the next Business Day (‘Prescribed ApplicationDay’). This means you will receive the application pricecalculated for the next Business Day; or

• after 2.00pm on a Prescribed Business Day, the applicationwill be processed the day after the Prescribed Business Day.

We will only start processing an application if:

• we consider that you have correctly completed theApplication Form;

• it has been correctly sent by you and received by State StreetAustralia Limited (‘Unit Registry’);

• you have provided the relevant identification documents; and

• application money (in cleared funds) stated in yourApplication Form has been received. The time it takes forapplication money to clear varies depending on how youtransfer the money and your bank’s turnaround time (it maytake up to four Business Days).

We reserve the right to accept or reject applications in whole orin part at our discretion and delay the processing of applicationswhere we believe it to be in the best interest of all the Fund’sinvestors, without giving any reason.

Making additional investmentsYou can make additional investments into the Fund at any timeby completing an Additional Investment Form together with youradditional investment amount. The minimum additional

investment into the Fund is $1,000. The Additional InvestmentForm is available online at www.azsestante.com.

Cooling-off periodIf you are a Retail Client you may have a right to ‘cool-off’ inrelation to an investment in the Fund within 14 days of the earlierof:

• confirmation of the investment being received or available;and

• the end of the fifth Business Day after the units are issued orsold.

No cooling-off period applies if you are a Wholesale Client. Theright to cool-off may not apply if you are an Indirect Investor,even if you are a Retail Client.

Further information regarding the cooling-off rights of IndirectInvestor is set out below.

A Retail Client may exercise this right by notifying us in writing at:


A Retail Client is entitled to a refund of their investment adjustedfor any increase or decrease in the relevant application pricebetween the time we process the application and the time wereceive the notification from the Retail Client, as well as anyother tax and other reasonable administrative expenses andtransaction costs associated with the acquisition andtermination of the investment.

The right of a Retail Client to cool-off does not apply in certainsituations such as if the issue is made under a distributionreinvestment plan, switching facility or represents additionalcontributions required under an existing agreement. Also, theright to cool-off does not apply to you if you choose to exerciseyour rights or powers as a unit holder in the Fund during the 14day period, this could include selling part of your investment orswitching it to another fund.

Indirect Investors should seek advice from their IDPS operatoras to whether cooling-off rights apply to an investment in theFund by the IDPS. The right to cool-off in relation to the Fund arenot directly available to an Indirect Investor. This is because anIndirect Investor does not acquire the rights of a unit holder inthe Fund. Rather, an Indirect Investor instructs the IDPSoperator to arrange for their monies to be invested in the Fundon their behalf. The terms and conditions of the IDPS guide orsimilar type of document will govern an Indirect Investor’sinvestment in relation to the Fund and any rights an IndirectInvestor may have in this regard.

Withdrawals

Access to your moneyInvestors of the Fund can withdraw their investment bycompleting either a withdrawal form available via AZ Sestante’swebsite at www.azsestante.com or provide a written request towithdraw from the Fund (detailing the number of units to beredeemed or the dollar value required, the account number, fundname and the name in which the investment is held).

You can fax your withdrawal request to 02 9323 6411 or mail to:


The minimum withdrawal amount is $1,000.

Once your withdrawal request is received, we may act on yourinstruction without further enquiry if the instruction bears youraccount number or investor details and your (apparent)signature(s), or your authorised signatory’s (apparent)signature(s).

Your proceeds will typically be made available on the 10thBusiness Day from the receipt of your valid withdrawal request.


Access to fundsVarious market conditions can cause difficulties or delays inselling the Fund’s assets, or result in a freeze of Fundwithdrawals. Such circumstances can mean that it may takelonger for you to receive your withdrawal proceeds. The Fund’sConstitution (‘Constitution’) allows AZ Sestante up to 21Business Days after receipt of a withdrawal request to makepayment. The 21 Business Day period may be extended whereAZ Sestante has taken all reasonable steps to realise sufficientassets to satisfy a redemption request and is unable to do sodue to one or more circumstances outside its control such asrestricted or suspended trading in the market for an asset orwhere in AZ Sestante’s opinion it is in the interests of unitholders to do so.

The price at which units are withdrawn is determined inaccordance with the Constitution (‘Withdrawal Price’). TheWithdrawal Price on a Business Day is equal to the NAV of theFund, divided by the number of units on issue and adjusted forthe buy/sell spread.

The Withdrawal Price will vary as the market value of assets inthe Fund rises or falls.

AZ Sestante reserves the right to fully redeem your investmentupon 30 days’ notice if your investment balance in the Fund fallsbelow $20,000 as a result of processing your withdrawalrequest. The payment of fees to your financial adviser is notregarded as a withdrawal request for these purposes.

AZ Sestante can deny a withdrawal request where accepting therequest would cause the Fund to cease to be liquid or where theFund is not liquid (as defined in the Corporations Act). When theFund is not liquid, an investor can only withdraw when AZSestante makes a withdrawal offer to investors in accordancewith the Corporations Act. AZ Sestante is not obliged to makesuch offers.

If you have invested indirectly in the Fund through an IDPS, youneed to provide your withdrawal request directly to your IDPSoperator. The time to process a withdrawal request will dependon the particular IDPS operator.

AZ Sestante will inform investors of any material change to theFund’s withdrawal procedures and rights via the websitewww.azsestante.com or as otherwise required by law.

Withdrawal cut-off timesAll valid withdrawal requests received by 2.00pm on a BusinessDay will be processed using the unit price next calculated afterthat Business Day (‘Prescribed Redemption Day’). Any validwithdrawal request received after 2.00pm on a Business Day willbe processed using the unit price calculated for the followingBusiness Day after the Prescribed Redemption Day.

Withdrawal termsWhen you are withdrawing, you should take note of thefollowing:

• in some instances we are not responsible or liable if you donot receive, or are late in receiving, any withdrawal moneythat is paid according to your instructions;

• we may contact you to check your details before processingyour withdrawal request. This may cause a delay in finalisingpayment of your withdrawal money. No interest is payable forany delay in finalising payment of your withdrawal money;

• if we cannot satisfactorily identify you as the withdrawinginvestor, we may refuse or reject your withdrawal request orpayment of your withdrawal proceeds will be delayed. We arenot responsible for any loss you consequently suffer;

• as an investor who is withdrawing, you agree that anypayment made according to instructions received by post,courier or fax shall be at the complete satisfaction of ourobligations, despite any fact or circumstances such as thepayment being made without your knowledge or authority;and

• you agree that if the payment is made according to theseterms, you and any person claiming through or under you,shall have no claim against us about the payment.

Withdrawal restrictions

Under the Corporations Act if the Fund is illiquid you can onlywithdraw where AZ Sestante makes a withdrawal offer inaccordance with the Corporations Act. AZ Sestante is notobliged to make such offers.

A Fund will be liquid if it has liquid assets (generally cash andmarketable securities) that account for at least 80% of its value.In addition, if AZ Sestante is unable to repatriate funds to meetwithdrawal payments, it may suspend the calculation of the NAVand withhold withdrawal proceeds.

Transferring units

You may transfer units in the Fund to another person. To do thiscontact Ironbark Client Services for instructions on how tocomplete the transfer, additionally you will need to send:

• a signed and completed, and where relevant, stampedAustralian standard transfer form that you can download fromwww.azsestante.com; and

• a completed Application Form from this PDS for the Fundcurrent at the time, completed by the person to whom theunits are being transferred as a new applicant to the Fund.

We reserve the right to decline certain transfer requests at ourdiscretion.

A transfer involves a disposal of units and may have taximplications. We recommend that you obtain tax and legaladvice (as necessary) before requesting a transfer.

Other important information

Authorised signatoryYou can appoint a person, partnership or company as yourauthorised signatory. To do so, please nominate them on theinitial Application Form and have them sign the relevant

sections. If a company is appointed, the powers extend to anydirector and officer of the company. If a partnership isappointed, the powers extend to all partners. Such


appointments will only be cancelled or changed once we receivewritten instructions from you to do so.

Once appointed, your authorised signatory has full access tooperate your investment account for and on your behalf. Thisincludes the following:

• making additional investments;

• requesting income distribution instructions to be changed;

• withdrawing all or part of your investment;

• changing bank account details; and

• enquiring and obtaining copies of the status of yourinvestment.

If you do appoint an authorised signatory:

• you are bound by their acts;

• you release, discharge and indemnify us from and againstany losses, liabilities, actions, proceedings, account claimsand demands arising from instructions received from yourauthorised representatives; and

• you agree that any instructions received from your authorisedsignatory shall be to the complete satisfaction of ourobligations, even if the instructions were made without yourknowledge or authority.

The Constitution

The Fund is governed by the Constitution that sets out how theFund must operate, and together with this PDS, theCorporations Act and other laws, regulates the ResponsibleEntity’s legal relationship with investors. If you invest in theFund, you agree to be bound by the terms of this PDS and theConstitution. A copy of the Constitution will be made availableon request. Please consider these documents before investingin the Fund.

We may amend the Constitution from time to time in accordancewith the provisions in the Constitution and the Corporations Act.

ReportsWe will make the following statements available to all unitholders:

• a transaction confirmation statement, showing a change inyour unit holding, provided when a transaction occurs or onrequest;

• annually distribution statements, issued only when the Fundhas distributed during the period;

• annual tax statement for each period ended 30 June, issuedonly when the Fund has distributed during the period; and

• a confirmation of holdings statement for each period ended30 June.

The following statements will be available to all unit holdersonline at www.azsestante.com:

• the Fund’s half-yearly financial account (if applicable);

• the Fund’s annual audited accounts for the most recentperiod ended 30 June; and

• monthly investment reports providing updates on the Fund.

DisclosureMaterial information in relation to the Fund, including continuousdisclosure notices, is uploaded on the website atwww.azsestante.com.

You may also obtain a copy of the most recent annual financialreport from the website or free of charge by contacting IronbarkClient Services on 1800 034 402.

If the Fund is a disclosing entity, the Fund is subject to regularreporting and disclosure obligations. Investors can obtain a copyof the following documents from the websitewww.azsestante.com:

• the most recent annual financial report lodged with ASIC bythe Fund;

• any half yearly financial report lodged with ASIC after thelodgement of that annual financial report but before the dateof this PDS; and

• any continuous disclosure notices lodged with ASIC by theFund after that annual financial report but before the date ofthis PDS.

Copies of documents lodged with ASIC in relation to the Fundmay be obtained from or inspected at an ASIC office.

Conflicts of interest

We, and our various service providers, may from time to time actas issuer, investment manager, custodian, registrar, broker,administrator, investment adviser, distributor or dealer, or beotherwise involved in other ways, in relation to other fundsestablished by us, which have similar objectives to those of theFund. It is possible that any of them may have potential conflictsof interest with the Fund in the course of business. We will, at alltimes, have regard in such event to our obligations to investorsand will endeavour to resolve such conflicts fairly.

In addition, subject to applicable law, any of the foregoing maydeal (as principal or agent) with the Fund, provided that suchdealings are carried out as if effected on normal commercialterms negotiated on an arm’s length basis.

We, our affiliates or any person connected with us may invest,manage or advise other funds that invest in assets which mayalso be purchased or sold by the Fund. Subject to law, neitherwe nor any of our affiliates nor any person connected with us, isunder any obligation to offer investment opportunities of whichany of us becomes aware to the Fund, or to account to the Fundor any investor in respect of (or share with, or inform, the Fund orany investor of) any such transaction or any benefit received byany of us from any such transaction.

Your privacy – privacy collection notice

When you provide instructions to us or our service providers ordelegates, we and our service providers or delegates will becollecting personal information about you. This information isneeded to facilitate, administer and manage your investment,and to comply with Australian taxation laws and other laws andregulations. Otherwise, your application may not be processedor we and our service providers or delegates will not be able toadminister or manage your investment.

The information that you provide may be disclosed to certainorganisations or bodies situated in Australia or overseas,including service providers or business associates who provideservices and financing in connection with our products andservices and business functions and activities that may include:

• the ATO, AUSTRAC and other government or regulatorybodies;

• your broker, financial adviser or adviser dealer group, theirservice providers and any joint holder of an investment;


• organisations involved in providing, administering andmanaging the Fund, the administrator, custodian, auditors, orthose that provide mailing or printing services; and

• those where you have consented to the disclosure and asrequired by law.

Currently, AZ Sestante does not disclose any privacyinformation to parties outside Australia but this may be subject tochange.

AZ Sestante may from time to time provide you with directmarketing and/or educational material about products andservices AZ Sestante believes may be of interest to you.

Should you not wish to receive this information from AZ Sestante(including by email or electronic communication), you have theright to “opt out” by advising AZ Sestante by telephoning1800 034 402, or alternatively by contacting Ironbark [email protected].

Subject to some exceptions allowed by law, you can ask foraccess to your personal information. We will give you reasons ifwe deny you access to this information. The AZ SestantePrivacy Policy outlines how you can request to access and seekthe correction of your personal information. The AZ SestantePrivacy Policy is available at www.azsestante.com and can beobtained by contacting AZ Sestante’s Privacy Officer on1800 034 402, or alternatively by contacting us via email [email protected].

AZ Sestante’s Privacy Policy contains information about howyou can make a complaint if you think AZ Sestante hasbreached your privacy and how AZ Sestante will deal with yourcomplaint.

You should refer to the AZ Sestante Privacy Policy for moredetail about the personal information that AZ Sestante collectsand how AZ Sestante collects, uses and discloses your personalinformation.

Anti-money laundering and counter terrorismfinancing (‘AML/CTF’)Australia’s AML/CTF laws require AZ Sestante to adopt andmaintain an Anti-Money Laundering and Counter TerrorismFinancing program. A fundamental part of the AML/CTFprogram is that AZ Sestante collects and verifies certaininformation about investors in the Fund.

To meet this legal requirement, we need to collect certainidentification information and documentation (‘Know YourClients (‘KYC’) Documents’) from new investors. Existinginvestors may also be asked to provide KYC Documents as partof a re-identification process to comply with the AML/CTF laws.Processing of applications or withdrawals will be delayed orrefused if investors do not provide the KYC Documents whenrequested.

Under the AML/CTF laws, AZ Sestante may be required tosubmit reports to AUSTRAC. This may include the disclosure ofyour personal information. AZ Sestante may not be able to tellyou when this occurs and, as a result, AUSTRAC may requireAZ Sestante to deny you (on a temporary or permanent basis)access to your investment. This could result in loss of the capitalinvested, or you may experience significant delays when youwish to transact on your investment.

AZ Sestante is not liable for any loss you may suffer because ofcompliance with the AML/CTF laws.

Labour, environmental, social and ethicalconsiderationsAZ Sestante’s decision to invest, retain or realise investments isbased on labour standards, or environmental, social or ethicalconsiderations. AZ Sestante may consider excluding investmentoptions on the basis of the industry in which they participate,including (but not limited to) the manufacture of landmines,cluster munitions, adult entertainment or tobacco products. AZSestante may also exclude an issuer based on other criteriasuch as involvement in environmental damage, corruption,human rights issues or labour practices. However, to the extentthese issues may financially affect an investment, that financialeffect could influence AZ Sestante ’s investment decisions.

Fund performanceThe latest available information on the performance of the Fundwill be available at www.azsestante.com or by calling IronbarkClient Services on 1800 034 402. A free paper copy of theinformation will also be available on request.

Corporate governance frameworkThe Board of the Responsible Entity is committed to achievingeffective compliance with all applicable laws, regulations andindustry codes.

The Responsible Entity’s compliance objectives are:

• to comply with the requirements of the law, regulatoryrequirements (e.g. Corporations Act and ASIC RegulatoryGuides);

• to proactively identify compliance issues impacting on itsbusiness operations and establish compliance proceduresand protocols to effectively and efficiently address thesecompliance issues;

• to monitor those procedures in place to ensure thatcompliance is maintained and that adequate reportingprocedures exist to resolve any issues that may arise; and

• to ensure that all its representatives are kept up-to-date withdevelopments in compliance requirements impacting onbusiness operations and respond to them in a systematic andtimely manner.

Conditions for use of the fax transaction facilityIn accordance with the Constitution, investors may give noticesto the Unit Registry. A notice given to the Unit Registry by fax iseffective only at the time of receipt by the Unit Registry. Youshould retain a copy of the fax confirmation sheet as proof that atransmission was successfully completed on the date and timeshown. This will assist if an issue arises as to the timing ofreceipt of a facsimile by the Unit Registry.

By completing the Application Form or a withdrawal request, youagree to be bound by the following additional conditions if yougive the Unit Registry a notice by fax:

• you acknowledge that there is a risk that fraudulent faxrequests may be made by a third party;

• you agree that neither of AZ Sestante, its officers, employeesor agents, are responsible for any fraudulently completedcommunications and that none of AZ Sestante, its officers,employees or agents will compensate you for any lossesarising from such communications; and

• you release and indemnify AZ Sestante, its officers,employees and agents against any liabilities whatsoever


arising from AZ Sestante, its officers, employees or agentsacting on faxed communications from, or purporting to befrom you.

Enquiries and complaintsThe dispute resolution process described in this offer documentis only available in Australia and is not available in New Zealand.

If you have any questions regarding the Fund or are notcompletely satisfied with any aspect of services regarding themanagement of the Fund, please contact Ironbark on1800 034 402. AZ Sestante seeks to resolve potential and actualcomplaints over the management of the Fund to the satisfactionof investors.

If you wish to lodge a written complaint, please write to:

AZ Sestante LimitedLevel 13, 1 Margaret Street, Sydney NSW 2000Email: [email protected]

Any complaint will be acknowledged in writing and responded towithin 45 days. If you believe that your matter has not been dealtwith satisfactorily, you may lodge a complaint with the AustralianFinancial Complaints Authority (‘AFCA’):

Online: www.afca.org.auEmail: [email protected]: 1800 931 678 (free call)Mail: Australian Financial Complaints Authority LimitedGPO Box 3, Melbourne VIC 3001

Time limits may apply to complain to AFCA and you should actpromptly or otherwise consult the AFCA websites to find out if orwhen the time limit relevant to your circumstances expires.

If you are investing through an IDPS, then enquiries andcomplaints should be directed to the operator of the IDPS, notAZ Sestante.

ConsentAZ Fund Management, An Zhong, AZ International HoldingsS.A., Ironbark, BNP Paribas and PricewaterhouseCoopers havegiven, and not withdrawn, their written consent to being named

in this PDS in the form and context in which they are named andfor the inclusion of information about the Fund. AZ FundManagement, An Zhong, AZ International Holdings S.A.Ironbark, BNP Paribas, PricewaterhouseCoopers and theiremployees and officers do not accept any responsibility arisingin any way for errors or omissions from this PDS, other than inrelation to the statements for which they have provided theirconsent.

Standard risk measure (‘SRM’)

The SRM has been developed by the Association ofSuperannuation Funds of Australia (‘ASFA’) and the FinancialServices Council (‘FSC’) at the request of Australian PrudentialRegulation Authority (‘APRA’).

The purpose of the SRM is to disclose the level of risk using astandard measure. It allows members to compare investmentsboth within and between managed investment schemes basedon the likely number of negative annual returns over any twentyyear period.

As shown in the table below, a risk band of 1 would suggest thatthe investment is the least risky investment, and a risk band of 7suggests a very risky investment.

Riskband Risk label

Estimated number of negativereturns over any 20 year period

1 Very Low Less than 0.5

2 Low 0.5 to less than 1

3 Low to Medium 1 to less than 2

4 Medium 2 to less than 3

5 Medium to High 3 to less than 4

6 High 4 to less than 6

7 Very High 6 or greater

Glossary

Administrator, SSAL State Street Australia Ltd ABN 21 002 965 200.

Application Price The price paid to acquire units in the Fund, calculated in accordance with the Constitution.

Business Day Any day other than a Saturday or Sunday or public holiday on which banks are open for business generallyin Sydney.

Corporations Act Corporations Act 2001 (Cth).

Commission deSurveillance duSecteur Financier(’CSSF’)

A public institution which supervises the professionals and products of the Luxembourg financial sector. Itsupervises, regulates, authorises, informs, and, where appropriate, carries out on-site inspections andissues sanctions. Moreover, it is in charge of promoting transparency, simplicity and fairness in themarkets of financial products and services and is responsible for the enforcement of laws on financialconsumer protection and on the fight against money laundering and terrorist financing.

Custodian, SSAL State Street Australia Ltd ABN 21 002 965 200.

Fund Sestante Global Macro Fund ARSN 619 981 752.

Indirect Investors Persons who invest in the Fund through an IDPS.

Investment Manager,AZ Fund Management

AZ Fund Management S.A.

Ironbark Ironbark Asset Management Pty Ltd. Provider of operational services, compliance, governancemonitoring and client services to the Fund.

NAV, Net Asset Value The value of the Fund or the Underlying Fund’s assets less its liabilities (as the context requires).


Responsible Entity AZ Sestante Limited ABN 94 106 888 662.

Retail Client Persons or entities defined as such under section 761G of the Corporations Act (Australia) or Clause 35 ofSchedule 1 of the FMCA (NZ).

Underlying Fund AZ Multi Asset Institutional Macro Dynamic Trading UCITS, AUD share class

Underlying FundAdministrator

The administrator of the Underlying Fund, BNP Paribas Security Services, Luxembourg branch (’BNPParibas’).

Unit Registry State Street Australia Limited ABN 21 002 965 200.

we, us, our,Responsible Entity

AZ Sestante Limited ABN 94 106 888 662.

Wholesale Client Persons or entities who are ‘wholesale clients’ within the meaning of that term under section 761G of theCorporations Act which generally include investors that:

a) invest at least AU$500,000 in the Fund; or

b) have net assets of at least AU$2.5 million or gross income of AU$250,000 for at least the last twofinancial years and can provide an accountant’s certificate to certify their assets or income; or

c) are ‘professional investors’ (e.g. holders of an AFSL, superannuation fund trustees, ASX-listedentities, and persons having or controlling gross assets of at least AU$10 million).

US Persons A person so classified under securities or tax law in the United States of America (‘US’) including, in broadterms, the following persons:

a) any citizen of, or natural person resident in, the US, its territories or possessions; or

b) any corporation or partnership organised or incorporated under any laws of or in the US or of anyother jurisdiction if formed by a US Person (other than by accredited investors who are notnatural persons, estates or trusts) principally for the purpose of investing in securities notregistered under the US Securities Act of 1933; or

c) any agency or branch of a foreign entity located in the US; or

d) a pension plan primarily for US employees of a US Person; or

e) a US collective investment vehicle unless not offered to US Persons; or

f) any estate of which an executor or administrator is a US Person (unless an executor oradministrator of the estate who is not a US Person has sole or substantial investment discretionover the assets of the estate and such estate is governed by non-US law) and all the estateincome is non-US income not liable to US income tax; or

g) any trust of which any trustee is a US Person (unless a trustee who is a professional fiduciary is aUS Person and a trustee who is not a US Person has sole or substantial investment discretionover the assets of the trust and no beneficiary (or settlor, if the trust is revocable) of the trust is aUS Person); or

h) any discretionary account or similar account (other than an estate or trust) held by a dealer orother fiduciary for the benefit or account of a US Person; or

i) any non-discretionary account or similar account (other than an estate or trust) held by a dealeror other fiduciary organised, incorporated or (if an individual) resident in the US for the benefit oraccount of a US Person.


Date post:	04-Aug-2020
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