Overview

The Switzer Higher Yield Fund (SHYF) is a floating-rate bond fund that seeks to provide investors with an attractive cash yield with low capital volatility by investing in a portfolio of high-quality and liquid fixed income securities. The fund aims to achieve total returns which are 1.5% to 3.0% greater than the RBA Cash Rate after fees and expenses on a rolling 12-month basis.

The fund will relaunch as a quoted managed fund with units expected to be quoted on the exchange with the ticker code SHYF by December 24.

Loyalty bonus

Investors who invest during the initial offer period will be eligible for a loyalty bonus of up to 0.50% of the amount invested during the offer period payable in the first year. This bonus will be paid quarterly in arrears as a secondary interest amount to investors who continue to hold their units at the end of each quarter.

The Manager

The portfolio is managed by Coolabah Capital Investments (Coolabah), a leading active credit manager with 13 analysts and 5 portfolio managers. Coolabah’s founder and CIO is Christopher Joye, one of Australia’s leading economists, policy advisors and fund managers, and a regular contributor to The Australian Financial Review.

Coolabah is majority employee owned and manages approximately A$4.5 billion of assets (as at October 2020) on behalf of leading super funds, insurers, financial advisers and high net worth investors. Coolabah specialises in the generation of credit alpha through finding assets that are trading at a discount to fair value that will realise capital gains as their credit spreads normalise. This contrasts with conventional fixed income managers that try to boost their yields by chasing credit default risk, liquidity risk, and/or interest rate risk.

Switzer Asset Management is the responsible entity for SHYF.

Fund Objectives

  1. To provide investors with low-risk, quarterly income, and
  2. to deliver total returns which are 1.5% to 3.0% greater than the RBA Cash Rate after fees and expenses on a rolling 12-month basis.

Benefits

Quarterly Income Low Capital Volatility
Attractive Cash Yield Expert Investment Management
Broker Trading and CHESS Statements Low Management Fee
Download an
Information Pack

Overview

The Switzer Higher Yield Fund (SHYF) is a floating-rate bond fund that seeks to provide investors with an attractive cash yield with low capital volatility by investing in a portfolio of high-quality and liquid fixed income securities. The fund aims to achieve total returns which are 1.5% to 3.0% greater than the RBA Cash Rate after fees and expenses on a rolling 12-month basis.

The fund will relaunch as a quoted managed fund with units expected to be quoted on the exchange with the ticker code SHYF by December 24.

Loyalty bonus

Investors who invest during the initial offer period will be eligible for a loyalty bonus of up to 0.50% of the amount invested during the offer period payable in the first year. This bonus will be paid quarterly in arrears as a secondary interest amount to investors who continue to hold their units at the end of each quarter.

The Manager

The portfolio is managed by Coolabah Capital Investments (Coolabah), a leading active credit manager with 13 analysts and 5 portfolio managers. Coolabah’s founder and CIO is Christopher Joye, one of Australia’s leading economists, policy advisors and fund managers, and a regular contributor to The Australian Financial Review.

Coolabah is majority employee owned and manages approximately A$4.5 billion of assets (as at October 2020) on behalf of leading super funds, insurers, financial advisers and high net worth investors. Coolabah specialises in the generation of credit alpha through finding assets that are trading at a discount to fair value that will realise capital gains as their credit spreads normalise. This contrasts with conventional fixed income managers that try to boost their yields by chasing credit default risk, liquidity risk, and/or interest rate risk.

Switzer Asset Management is the responsible entity for SHYF.

Fund Objectives

  1. To provide investors with low-risk, quarterly income, and
  2. to deliver total returns which are 1.5% to 3.0% greater than the RBA Cash Rate after fees and expenses on a rolling 12-month basis.

Benefits

Quarterly Income Low Capital Volatility
Attractive Cash Yield Expert Investment Management
Broker Trading and CHESS Statements Low Management Fee
Download an
Information Pack

Key Fund Info

Fund Facts

Key Fund Facts

Exchange Code SHYF
Responsible Entity Switzer Asset Management
Investment Manager Coolabah Capital Institutional Investments
Fund Investments Cash, Credit and Hybrid Securities
Benchmark RBA Overnight Cash Rate +1.50%
Management Fee 0.70%
Performance Fee 20% excess return above the Benchmark after Management Fee
Application/Withdrawal Fee Nil
Distributions Quarterly
Minimum Investment $10,000 during initial offer
APIR Code SWI001AU
ARSN 093 248 232

Investment Guidelines

Max exposure to a single issuer 33%
Max exposure to a single security 33%
Max exposure to asset backed securities 40%
Max exposure to unrated securities 10%
Max exposure to sub-investment grade securities (other than hybrids) 15%
Max exposure to hybrid securities 40%
Max exposure to derivatives 10%
Exposure to cash and cash equivalent securities 2 – 20%

Portfolio Characteristics

Asset allocation


Distributions

Why Invest

Attractive Cash Yield Objective

The Switzer Higher Yield Fund seeks to offer attractive cash yield whilst minimising the risk of capital loss. The objective of the Fund is to deliver total returns after fees and expenses which are 1.5% to 3.0% greater than the RBA Cash Rate on a rolling 12-month basis.

Low Capital Volatility

Debt is higher up the corporate structure than equity, which means interest payments to debt holders are required to be paid before dividends are paid to shareholders. Because of this, debt securities are typically less volatile than equities.

Quarterly Income

The Fund will generally pay quarterly distributions in January, April, July and October, sourced from a portfolio of Australian cash, bonds and hybrid securities. You can choose to receive your distributions as cash or to have them automatically reinvested into additional units in the Fund.

Expert Investment Management

The Fund provides access to Coolabah Capital Investments (Coolabah), a specialist fixed income manager with extensive expertise in the fixed income asset class. Coolabah was founded by Christopher Joye, one of Australia’s leading economists, policy advisors and fund managers. Coolabah’s edge is in alpha generation in liquid, high-grade credit. This is in contrast to traditional fixed-income managers that drive returns through adding more interest rate duration, credit default, and/or illiquidity risk. This alpha generation is a function of the world-class analytical insights rendered by Coolabah’s extremely well-resourced team.

Diversification

The Fund enables investors to access income from an asset class which most retail investors overlook. Fixed income securities are generally regarded as defensive investments that exhibit lower volatility in their capital value over time relative to higher risk asset classes including equities. By blending lower risk, fixed income securities with equities and other portfolio assets, investors may reduce their overall portfolio risk.

Track Your Investment in Real-Time

The Fund’s Net Asset Value (NAV) per unit will be published on our website daily. Investors will also be able to see the prices at which other investors are prepared to exchange units when units in the Fund are quoted on the exchange.

Low Management Fee

The management fee is 0.70% p.a. including GST net of RITC. The Management Fee covers the management of the Fund and its assets, and Fund outgoings including administration, accounting, audit and registry fees and expenses. There are no establishment or contribution fees. Investors may incur brokerage costs in purchasing or selling units on the exchange.

Invest your way

The fund is a multi-distributed managed fund, meaning investors can buy and sell units either directly with Switzer Asset Management or by purchasing units via a broker, once the fund is quoted. Investors who enter the Fund via the exchange can dispose of their units directly with Switzer Asset Management and vice versa. Investors who choose to hold their investment on the CHESS register will have the benefit of CHESS holding statements showing the numbers of units that they own.

The Manager

Coolabah Capital Investments is an independent long and long-short active credit manager with a team of 5 portfolio managers led by Christopher Joye and chaired by experienced super fund director Melda Donnelly.

The firm is majority employee owned and manages around A$4.5 billion of assets (as at October 2020) on behalf of institutional and retail investors.

Coolabah specialises in the generation of credit alpha through finding assets that are judged to be trading at a discount to fair value which are expected to realise capital gains as their credit spreads normalise. This contrasts with conventional fixed income managers that try to boost their yields by chasing credit default risk, liquidity risk, and/or interest rate risk.

Key investment professionals include:

Chris Joye

Chief Investment Officer & Portfolio Manager

B.Com.

Ying Yi Ann Cheng

Portfolio Management Director & Market Technicals Analyst​

B.Com. (Hons)

How to Invest

Frequently Asked Questions

  • What are the fees?

    The management fee is 0.70% per annum, inclusive of GST. There is a performance fee of 20% of the excess return of the Fund (after the management fee and excluding any accrued performance fee) above the Benchmark.

  • What does the Fund invest in?

    The Fund can invest in:

    Bonds being Australian government and semi-government bonds, Australian corporate bonds (including foreign denominated bonds hedged back into Australian dollars) and commercial paper;

    Asset backed securities including residential mortgage backed bonds and asset backed bonds;

    Hybrid securities including capital notes, subordinated notes, convertible preference shares, preference shares that are listed on an exchange, and unlisted subordinated notes issued in Australia by investment grade entities; and

    Cash and cash equivalents including cash investments and term deposits including exchange traded funds or trusts that invest solely in Australian dollar denominated deposits issued by authorised deposit taking institutions (ADI’s) that are regulated by APRA.

    The Fund may also invest in exchange traded derivatives for risk management purposes, though not to a material extent. Use will generally not exceed 10% of the net asset value of the Fund, other than temporarily and in exceptional circumstances. Leverage or gearing is not permitted in the Fund.

    The Fund’s typical asset allocation will be as follows:

    Bonds: 50% to 90%
    Asset backed securities: 0% to 40%
    Hybrid securities: 0% to 40%
    Cash and cash equivalents: 2% to 20%

    The Fund aims to maintain assets with an investment grade credit quality, targeting a dollar-weighted average Standard & Poor’s ’A-’ credit rating (long-term) across its bonds and deposits (or equivalent rating as determined by rating agencies). Refer to Section 4 for further information on the Fund’s portfolio, investment strategy, asset allocation and exposure limits.

  • How and when can I access my money?

    Investors can exit the Fund by either making a direct withdrawal request to Switzer Asset Management using a Withdrawal Form, or by selling units on the Exchange. You must hold your units on the issuer sponsored sub-register to make a withdrawal request directly to Switzer Asset Management. If you hold your units with a Holder Identification Number (HIN) (and the units are not held on the issuer sponsored sub-register), your stockbroker can assist you with the transfer in the same way you would buy and sell ordinary shares.

  • What is an iNAV?

    iNAV stands for Indicative Net Asset Value. The Net Asset Value (NAV) is calculated by deducting all liabilities (including fees) from the total value of the Fund’s assets and dividing this number by the number of units on issue.

    During each Trading Day, an indicative NAV (iNAV) is published to take into account any movement of the prices of those securities that comprise the Fund’s investment portfolio.

  • How often is income paid

    Distributions will generally be paid in January, April, July and October. You can choose to have your distributions automatically reinvested into additional units.

  • How do I invest?

    Investors can enter the Fund by either applying for units directly with the Responsible Entity using an Application Form or by purchasing units on the exchange, once units are quoted on the exchange.