Sandhurst Select Mortgage Fund

Fund overview

The objective of the Sandhurst Select Mortgage Fund (Fund) is to provide consistent returns, regular income and capital stability by investing in a broad selection of mortgage assets and other securities.

Investment Strategy

Sandhurst aims to achieve the investment objective of the Select Mortgage Fund by controlling exposure to risk from interest rate variations and mortgage defaults. Up to 90% of the Fund may be invested in Australian first registered mortgages and mortgage backed securities. Sandhurst makes mortgage advances at fixed rates, variable rates and a combination of both. Further diversification is provided by geographical spread and variation in the type, purpose and use of underlying security properties.

Sandhurst is an experienced investment and loan manager and is committed to delivering a well managed diversified portfolio of mortgages. Mortgages are spread across a range of assets including residential, rural, retail and commercial properties.

At least 10% of the Fund will be held in liquid assets to maintain liquidity and to convert surplus cash into income producing assets.

The authorised investments of the Fund currently include the following investment classes:

a first registered mortgage of land in any State or Territory of the Commonwealth of Australia
mortgage backed securities
a bank accepted or bank endorsed bill of exchange which at the time of acquisition has a maturity date of not more than 200 days
a certificate of deposit issued by a bank whether negotiable, convertible or otherwise
a deposit or term deposit with a bank

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Indicative Rate¹

1 April 2012 to 30 June 2012 4.90% p.a.

At the beginning of each quarter Sandhurst will announce an indicative rate of return (net of all fees and costs) for the Fund for the following quarter, referred to as the indicative rate. Sandhurst calculates the indicative rate by careful analysis of the Fund’s investment income and by considering factors such as economic and market conditions. Sandhurst may change the indicative rate for the quarter at any time before the end of the quarter.

However, the distribution rate paid to investors each quarter will be the amount earned by the Fund, after deduction of all fees and costs. There is a risk that the rate paid may be more or less than the indicative rate. If you withdraw your investment before the distribution date, Sandhurst will use the current indicative rate to calculate your interest income for the period of your investment in the Fund.

To view previous returns of the Fund click here.

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Features

Operation	Passbook or investment statement, issued quarterly
Minimum initial investment	$5000 by cheque or direct credit only
Minimum holding	$2000
Income distributions	1 January, 1 April, 1 July and 1 October Calculated on your daily investment balance and paid quarterly, within 7 days of the calculation dates
Income payment options	Reinvestment – automatically reinvested as they fall due Direct credit – credited to your financial institution’s account By cheque
Withdrawals²	Each investment is generally available after an initial 90 day investment term Cheque withdrawals only
Minimum additional investments	$500 Additional investments of less than $500 are permitted if they represent income distributions, dividend payments or direct credit from other accounts.

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Why choose the Sandhurst Select Mortgage Fund?

100% of funds are invested in income generating assets, including first registered mortgages and cash assets
Since September 2002, the Select Mortgage Fund has equalled or exceeded the indicative rate 80% of the time¹
Unlike some other mortgage funds, all redemption requests have been paid to investors since the inception of the Fund²
No application or withdrawal fees and a competitive management fee³, which means more of your money is working for you.
Can be used to balance a portfolio of longer-term investments or to offset less liquid assets

Fees on your account

No account keeping fees
No entry or exit fees
No fees for additional deposits
Indirect Cost Ratio⁴ as at 31 March 2012 is 1.11% p.a.

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Investments in this Fund are not deposits with, guaranteed by, or liabilities of the Bendigo and Adelaide Bank Limited, or any other bank and are subject to normal investment risk including loss of some or all of the principal invested. Past performance is not an indication of future performance.

¹ The indicative rate is not guaranteed and there is a risk that the rate paid may be lower than the published indicative rate.
² Sandhurst shall satisfy withdrawal requests as soon as practicable (generally on the same day, but not more than 12 months). However, withdrawal requests may be delayed or refused if in Sandhurst’s reasonable opinion it is in the best interests of investors as a whole to do so. Investors will only have limited rights to withdraw if the Fund does not satisfy the liquidity test in the Corporations Act. There is a risk that withdrawal proceeds will not be paid within a reasonable period after the initial investment term.
³ Refer to the ‘Fees and other costs’ section of the current Product Disclosure Statement for more details of fees and costs.
⁴ Indirect Cost Ratio (ICR) is calculated using the net asset value of the Fund (inclusive of GST). The ICR includes management fees and certain other expenses. Refer to the Product Disclosure Statement for further information on fees and costs.