INVEST WITH MARCUS
In order to make life simple I have established a two Separately Managed Accounts (SMAs - a type of managed fund) which allows Members to invest with us.
"SMA" is a bit of jargon. From your point of view consider it as a fund, a mechanism that allows us to do your stock picking for you, that effectively appoints us as your own personal fund manager.
We have invested our own money into the SMA and offer Members and non-Members the opportunity to invest alongside us. WE have two funds the Marcus Today SMA (growth focused) and the Marcus Today Income SMA.
A feature of an SMA that might interest you is that through this structure you are the beneficial owner of the underlying shares, we are simply directing traffic. You are not buying units in our fund as you might with a managed fund, you (we) are buying the individual underlying stocks beneficially in your name (they are actually held beneficially in your name by the custodian HSBC).
Unlike a managed fund that has its own tax position, using the SMA you can utilise your own tax status and collect your own franking credits, which for pension phase investors is essential. It also means that if Marcus Today went bust we have no beneficial interest in your shares. They, and your cash, are instead held by the custodian (HSBC) with you as the beneficial owner.
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 Marcus Today SMA is focussed on Australian listed growth stocks of up to 50 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 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) - if you want to join the herds of balanced portfolio investors that return you the average returns less fee you can achieve that without us. We are focused on capital growth.
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 our and your 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 making money for you, which is what we do.
Here are a few explanatory downloads:
The Macus Today Income SMA - Seeing a great deal of interest in the original MT SMA and after a lot of requests from Members to also offer something with a greater focus on income, particularly from self funded retirees in pension phase. The Marcus Today Equity Income SMA does just that. Its aim is “to provide a high level of regular tax‐effective income, combined with competitive capital growth over the medium to long‐term by investing in a portfolio of Australian equities."
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 higher 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 big obvious stocks, there might also be a few surprises.
The other main difference between the SMAs is that the Equity Income SMA 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 my team and I doing all the work for you, using the proven Marcus Today stock picking skills and portfolio construction expertise.
DOWNLOAD LATEST QUARTERLY PERFORMANCE REPORTS
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.
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) means low transaction costs.
- 24/7 website based transparency of stocks held within your own personal portfolio provided through the Praemium administration platform.
- Automatic rebalancing of your portfolio when we make changes to stock held.
- 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.
- Consolidated reporting.
- Portability of stocks - ability to move securities into or out of accounts at any time.
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:
- First $250,000 0.37% pa
- $250,001-$500,000 0.25% pa
- $500,001-$1,000,000 0.15% pa
- $1,000,001-$2,000,000 0.10% pa
- $2,000,000-$3,000,000 0.05% pa
- $3,000,000+ 0.00%
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.
Do I need a financial adviser?
The other key question we get asked 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.
Talk to our team or send in your application: email@example.com or call 0428 062 327. You can also send in your applications via Fax on 03 9867 2131 or post it to Chichi Nwokocha, Marcus Today Suite 3, Level 3, 636 St Kilda Road, VIC 3004.