INVEST WITH MARCUS

After a lot of work I/we have established an SMA (what's known as a Separately Managed Account) which allows Members to invest with me.

We (my Team and I) have invested our own money into the SMA, so we are managing our own money and asking you to come along for the ride.

The feature of an SMA that might interest you is that through our system you effectively own the underlying shares. We are simply directing traffic.

So unlike a managed fund that has its own tax position, you can utilise your own tax status and collect your own franking credits, which for pension phase investors especially is essential. It also means that if Marcus Today went bust we have no beneficial interest in your shares. They are already registered in your name on your HIN.

The Marcus Today SMA is deliberately designed to be at the aggressive end of the investment spectrum relative to the usual managed fund definitions (growth/conservative/cash etc) because there is little value in us joining the herds of diversified portfolio offerings. To ensure we have a high-conviction portfolio, we have limited ourselves to 20 stocks and whilst we are focused on capital growth and income, the emphasis is on capital growth. On that basis more conservative investors might only put some of their funds towards the SMA rather than all of them depending on their risk profile. You might also want to start small with just some of your funds rather than all and add to it when we are successful and you come to trust our performance.

We charge a 10% performance fee (we get 10% of any outperformance subject to certain conditions) - which may put you off - but it is a statement that we are highly geared to success, not just because we are invested ourselves, but because we make more money if you make more money. Our interests are aligned. Without a performance fee our goal would simply be to sell you the SMA and keep you in it, not spend all day worrying about stocks which is what we do.

As a 20 stock portfolio but with the option to go to 100% cash we will also be managing 'market' risk through the cash weighting. So we are not just stock watching - we are able to pull everything out depending on market conditions. Something else we spend all day worrying about.

Footnote - We have also chosen not to invest in gambling, predatory credit lending, smoking and sugar.

I look forward to you joining me in the SMA.


THE MARCUS TODAY SEPARATELY MANAGED ACCOUNT

The Marcus Today Separately Managed Account or "SMA" is a concentrated growth portfolio of up to 20 Australian equities, actively managed by the Marcus Today investment team headed by Marcus Padley. The aim is to achieve superior "total return", combining capital growth with income with the focus on capital growth.

The investment strategy involves:

  • Fundamental stock analysis, with particular focus on return on equity, future earnings growth and relative valuations (PE relative to history and peer group).
  • Consideration of a "quality" rating through features such as management quality and track record, corporate governance, balance sheet management, company direction and market sentiment.
  • Macroeconomic and thematic influences, including the global growth environment, industry structure and position in the investment cycle and investment "themes". (E.g. the search for yield).
  • Technical analysis - Marcus Today uses a technical overlay to assist in timing entry into a stock which has already met fundamental, quality and thematic filters. Marcus Today also use technical features to monitor the position and help time any exit.

The Marcus Today SMA is designed for investors who:

  • Are seeking an actively managed Australian equity portfolio with a relatively aggressive risk profile;
  • Are seeking medium to long term capital growth, with some income; and
  • Are prepared to accept some fluctuation in short term returns

The main benefits of investing into the Marcus Today SMA are:

  • Access to Marcus Today's stock picking skills and portfolio construction expertise
  • This is not the same structure as a Managed Fund, you retain the beneficial ownership of all shares
  • Cost-effective investing with a trade netting policy (buys and sells are matched across the host platform)
  • Transparency of stocks held within the portfolio.
  • Automatic rebalancing.
  • Tax effectiveness - compared to managed funds, investors do not inherit the capital gains of other investors - you get your own franking credits, they are not shared across all the other investors as they are with most managed funds.
  • Customisation - personal circumstances and objectives can be accommodated with stock substitution on an individual basis. In other words you can add other stocks if you wish.
  • Consolidated reporting.
  • Portability of stocks - ability to move securities into or out of accounts at any time.



To find out more or to invest in the Marcus Today SMA please click on the appropriate application form above, complete it, save it and send it to sma@marcustoday.com.au, or Fax it on 03 9867 2131 or post it to Chichi, Marcus Today Pty Ltd, PO Box 1020, St Kilda South, VIC 3182.

Or you can contact Chichi initially at Marcus Today on 0428 062 327 or email sma@marcustoday.com.au for more information.


MT EQUITY INCOME SMA

We recently launched our new MT Equity Income SMA and we’ve had a few questions about it, particularly in relation to the differences between it and the original SMA portfolio. So to address these questions and any you didn’t even know you had, here is a bit more background about the new offering.

We've had a great deal of interest in the original MT SMA and lots of requests from Members to also offer something with a greater focus on income, particularly from self funded retirees in pension phase. The new Equity Income SMA does just that. Its aim is “to provide a high level of regular taxeffective income, combined with competitive capital growth over the medium to longterm by investing in a portfolio of Australian equities."

In other words, this is a lot like the original SMA but with a greater focus on returns through income. It is still an equity portfolio, NOT a “fixed income” portfolio, but will hold companies paying high and tax-effective income. We also hope to differentiate the Equity Income SMA from other income-generating equity funds by not just holding the traditional high yielders but by also looking for a bit of a growth kick. Income plus growth where possible. So while we will probably hold the banks and Telstra at various times, there might also be a few surprises.

The other main difference between the portfolios is that the Equity Income portfolio is not a “high conviction” portfolio, unlike like the original SMA with its limit of 20 stocks. It will normally hold more companies, up to 40, and it has a different benchmark – the S&P/ASX 200 Industrials Accumulation Index - due to the different focus on return composition and hence stock "universe".

The stock selection process is the same, with the slight difference being the emphasis we place on the various fundamental factors...obviously more on income. All the other attractions of the SMA are the same, including beneficial ownership of shares, cost-effective trade pricing, consolidated reporting, transparency and personal customisation. Not to mention the benefit of having me and my team doing all the work for you, using the proven Marcus Today stock picking skills and portfolio construction expertise.

So now you have the choice of two Marcus Today SMA investment portfolios - a high conviction total return portfolio and an income portfolio focused on high, tax-effective dividends.

The Equity Income Portfolio will share similar holdings to the MT Income Portfolio that we've run for Members for many years, although it will not necessarily be a replication. The Equity Income SMA could also hold companies which are in the original SMA.

CURRENT PORTFOLIO - We are currently holding 26 stocks with a cash weighting of 23%. The portfolio yield is a touch over 5% on a grossed up basis, and this includes the cash position. Without revealing all our stock picks I can give you a bit of flavour by listing the top 5 holdings, in alphabetical order.

  • BT Investment Group (BTT)
  • Credit Corp (CCP)
  • Flight Centre (FLT)
  • Macquarie Group (MQG)
  • Telstra (TLS)

To find out more about both SMAs you can refer to the INVEST WITH MARCUS area on our website, or click on the application forms or other links below. You can also call Chichi on 0428 062 327 or email sma@marcustoday.com.au for more information.

I look forward to you joining me as a "fellow investor" in the SMAs.



FAQs

We have had a great response from Members to the SMA (Separately Managed Account).

From some of our conversations with interested Members however it is clear that there are a couple of points in the PDS (Production Disclosure Statement above) and other documents that aren't completely clear. If one person is asking the question then there are probably many more who are concerned so we want to clear a few things up.

FEES

The PDS makes reference to a number of fees including Establishment Fee, Contribution Fee, Adviser Service Fee, Dealer Group Service Fee, Research Fee. They all have amount of “up to x%” in the PDS. That’s the give-away. All of these fees are discretionary and MAY be charged by your financial adviser, if you have one. These fees are not charged by the Marcus Today SMA. If you apply to invest in the SMA through us, these “up to” type fees do not apply and the only fees you need to know about are the ones in the SMA Fact Sheet. They are:

Administration Fee:

  • First $250,000 0.37% pa
  • $250,001-$500,000 0.29% pa
  • $500,001-$1,000,000 0.24% pa
  • $1,000,001-$2,000,000 0.19% pa
  • More than $2,000,000 0.07% pa

Investment Fee: 0.75% pa (includes GST)

Performance Fee: 10% of outperformance compared to the benchmark (subject to positive performance and a high-water mark)

In-specie Transfer Fee and Transaction Fees as listed in the Fact Sheet.

FINANCIAL ADVISER

The other key question is whether you need an adviser. The PDS states that a Nominated Representative (financial adviser) is required to invest in the SMA. If you already have an adviser, then you can apply through them, but if you don’t have an adviser and you don’t want one, then Marcus Today Investment Strategists (MTIS) has the relevant AFSL and acts as your Nominated Representative for investment in the SMA. (There is no adviser fee to do this).

If you don’t have an adviser and you want one, well we can handle that too as we also provide strategic and structural advice (including tax, SMSF, aged care, insurance and administration). Just let us know. But you don’t need an adviser to invest in the SMA.

Again you can apply by clicking on the Application forms above or you can find out more by clicking here or can you contact Chichi at Marcus Today on 0428 062 327 or email sma@marcustoday.com.au. Chichi can provide the documentation by email and our Marcus Today staff will assist with the application.

I look forward to you joining me in the SMA