KFM Income Fund

ARSN 126 274 575

Objective of the Fund

To provide an income stream in excess of 1-year Bank Bill Swap Rate (BBSW) plus 4% pa (since 7/7/21), which is the Fund performance objective, from a diversified range of ASX Listed Income-producing securities.

Investment Strategy

The Fund invests predominantly in high yielding securities listed on the ASX such as hybrid securities and corporate bonds (fixed and floating), unsecured fixed interest investments, property trusts, preference shares, utilities and infrastructure securities and high yielding ordinary shares, particularly bank shares, as well as government bonds and cash. Option strategies (buy & write) are used for generating additional income and partial asset protection from leading stocks. The Fund is actively managed.

Typical Investor

This product is likely to be appropriate for consumers who are seeking income and some capital growth, to be used as a core component or small allocation of their portfolio, with a medium-term investment timeframe and medium risk and return profile. This Fund is classified as an RG240 Hedge Fund and may have complex features.

Fund Facts

Date: 31 July 2022
wdt_ID Retail Fund details New column
1 Unit Price (cum-distribution) $0.7613 entry, $0.7575 exit
2 Distributions Quarterly (CPU) -Jun 22 4.6813c
41 - Mar22 0.7078c
35 - Dec21 0.7590c
18 - Sep21 0.3893c
21 Fund size (NAV) $18.80 m
22 APIR code VEN0007AU
23 Responsible Entity Equity Trustees Limited
24 Custodian NAB Asset Servicing
25 Registry Service OneVue Registry
Retail Fund details
How To InvestHow To Invest

Performance

Risk

 

Like all investments, an investment in the Kaplan Income Fund carries risk which may result in the loss of income or capital invested. In addition to the general risks of investing, specific risk associated with investing in the Fund includes, but are not limited to, investment selection, strategy risk, and equity risk. For further information about the risks of investing in the Fund please refer to Section 6 of the PDS.
Fund Performance – Net of Fees & Expenses
Date: 31 July 2022
wdt_ID Period Distrib. (+franking)% Growth % FUND Return^ % (Net of Fees + Franking) FUND Return no-franking Franking Return % Performance Benchmark %
13 1 month 6.14 -3.24 -2.90 2.90 0.00 0.57
2 3 months 6.09 -9.14 -3.05 -3.38 0.33 1.66
3 6 months 7.24 -7.64 -0.39 -0.94 0.55 2.95
4 FYTD* 6.14 -3.24 2.90 2.90 0.00 0.57
5 1 yr pa 9.05 -6.50 2.55 1.67 0.88 5.17
6 2 yr pa 6.61 0.08 6.69 5.89 0.80 3.30
7 3 yr pa 6.84 -3.70 3.14 2.34 0.80 3.30
8 5 yr pa 7.37 -2.42 4.95 4.00 0.95 3.48
9 7 yr pa 7.60 -1.96 5.64 4.65 0.99 3.60
11 Inception 7.08 -1.80 5.28 4.37 0.91 4.90
*FYTD means financial year to date
^ Fund Return is inclusive of reinvested distributions and franking credits based on the NTA of the Fund.
# Inception date 31/07/2007
“Past performance is not necessarily an indicator of future performance”
10 Year Chart – Common Based to $1.00
10 Year Chart – Common Based to $1.00
10 Year Chart – Common Based to $1.00
Please rotate your phone to a horizontal view to see the full performance table and interactive chart
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Fund Manager

Introduction

Kaplan Funds Management Pty Limited (KFM) ABN 98 079 218 643, AFSL 240815 has been managing funds with an absolute return philosophy since 1998. The manager’s philosophy is derived from an income oriented investment style combined with active, risk averse and disciplined portfolio management. Kaplan’s management style has appealed to charities, foundations, defined pension funds, self-managed super and high net worth individuals seeking consistent returns with low volatility.

Kaplan is a wholesale fund manager with approximately $1 billion under management in both equities and interest rate benchmarked portfolios. Wholesale products include investment trusts for the professional investor market and charities, a pooled superannuation trust and discrete equities and income mandates for corporate clients. Kaplan manages the portfolio of Ironbark Capital Limited, an ASX listed Investment Company (ASX code IBC) capitalised in excess of $60m. Kaplan is the manager of the KFM Income Fund a retail product issued by Equity Trustees.

SQM Research Report

The SQM Research Rating for the KFM Income Fund is available to financial advisors, please email enquires@kaplanfunds.com.au to obtain a copy.

FAQ

Why are franking credits included in the performance calculation for the Fund?
Franking credits are integral to the valuation of hybrid securities. Hybrid distributions comprise two components: cash and franking credits. If franking credits are unavailable to distribute, then the issuer increases the cash component equivalent to the reduction in franking credits. The market values hybrid securities based on a trading margin that is inclusive of franking credits.
What is the difference between a floating rate note and a fixed rate note?
The distribution or coupon payment for a floating rate note is comprised of 2 parts. A reference rate (usually the 90-day bank bill rate) plus an issue margin. The issue margin is fixed, for example 3.00%, and the reference rate is floating and varies with market interest rates and the official cash rate. Therefore, as the reference rate moves higher the distribution increases and vice versa. In this way, the capital value of floating rate notes is protected from interest rate movements, if there are no credit concerns.

A fixed rate note has a fixed coupon rate (for example 3.50%) for the duration of the note. As market interest rates move the capital value of the note adjusts rather than the distribution as opposed to a floating rate note. Floating rate notes offer greater capital stability compared to fixed rate notes, whereas fixed rate notes offer greater income certainty.

Hybrid securities and corporate bonds are typically floating rate instruments.

What is the buy & write strategy?
The buy & write strategy involves buying selective shares and selling ASX listed exchange traded call options over those shares for a price or premium. This strategy gives away some of the upside potential from a shareholding but generates option premium income consistent with the income emphasis of the portfolio. Downside protection is provided by the amount of premium income received. This strategy reduces the volatility of the investment.
Why does the Fund invest only in ASX listed securities?
ASX listed securities cover a range of income producing securities such as ordinary shares, property trusts, utilities and hybrid and corporate bonds suitable for the fund. Pricing is transparent and daily market trading provides liquidity in a highly regulated market.
How often does the Fund distribute?
The Fund distributes on a quarterly basis (June, September, December, March). An annual tax statement is issued which details the components of the distribution including franking credits.
What is the frequency of unit pricing?
The Fund is valued by its custodian on a daily basis and the unit registry calculates the unit price which is published daily. Applications and redemptions are processed daily.
Are there any exit fees?
There are no exit fees. The Fund charges a transaction fee of 0.25% on entry and 0.25% on exit. The transaction fee is charged to cover trading expenses such as stock brokerage fees when investments are bought or sold in the Fund related to applications or redemptions.
What fees & expenses are charged to the Fund?
The management fee is 0.75% pa and expense recovery is 0.10%. The manager receives 0.85%pa to cover their management fee and all operating costs incurred from custodians, registry, accounting etc. Total fees and expenses are capped at 0.85%pa.

There is a 10% performance fee paid to the manager if the Fund exceeds its benchmark performance. The performance fee is subject to a high-water mark, which means subsequent underperformance needs to be made up before the next performance fee is paid.

Does the Fund have an independent research rating?
Yes, SQM Research provided a Superior Rating of 4 stars (out of 5) in October 2020. The research report can be obtained from your financial advisor.

How To Invest

Step 1 – Download Product Disclosure Statement

Step 2 – Download Application Form

Step 3 – Consult your financial advisor

Step 4 – Submit the application form and any required identification documents

Email

Kaplan Fund Management Services
enquiries@kaplanfunds.com.au

Mail

Suite 607, 180 Ocean Street
Edgecliff NSW 2027

Fax

+02 8917 0355

Phone Enquiry

+02 8917 0300