AMP Capital Structured High Yield Fund

Fund aim

The Fund normally invests in a diversified portfolio of high yielding subordinated and senior debt assets and hybrid debt assets in countries around the globe. For example, these investments may be made in the infrastructure sector or in the context of leveraged and management buyouts.

Investment objective

The Structured High Yield Fund is targeted at investors who seek an attractive yield by outperforming the UBS Australia Bank Bill Index on a rolling 12-month basis. It aims to do this by investing in a diversified portfolio of debt assets in defensive industries while accepting a higher level of risk than conventional fixed interest products but less than the risk associated with diversified equity products.

Benchmark

UBS Bank Bill 90day

Inception date

31 August 1997

Recommended investment timeframe

Minimum of 3 - 5 years

Risk Rating

Medium

Investment Strategy

The investment strategy for the Structured High Yield (SHY) Fund is to invest in a diversified portfolio of high yielding debt assets. Investments are spread across a range of industry sectors with a typical investment exhibiting a low level of industry and business risk through either a natural monopoly or strong industry position. Investment opportunities sought include infrastructure assets, leveraged and management buyouts. The fund’s investments typically:

• are subordinated to senior debt,
• are secured against the assets of the borrower by a second ranking charge,
• have limited rights to enforce against the security,
• have rights to accelerate the borrowers’ obligations to repay the debt, and
• have the right to lock-up returns to equity.

The average shadow rating of investments in the Fund is “BB”. For any new investments, the fund will not invest more than 10% of the Fund (based on gross asset value at the time of the investment) in any single investment or more than 20% in a single industry.

Hedging

In normal circumstances, any foreign currency denominated assets will be hedged back to Australian dollars.

Derivatives

Options, futures and other derivatives may be used to reduce risk or gain exposure to physical investments, when we think it worthwhile.

Distributions

Quarterly

Minimum investment

A$10 million

Buy/sell spread

Nil

Withdrawal

Withdrawal requests will generally be processed quarterly according to specified withdrawal dates. Withdrawal amounts may be reduced on a pro-rata basis, and the unmet portion of withdrawal requests cancelled, where the amount of funds available for meeting withdrawal requests is not sufficient to fully meet all withdrawal requests relating to a specified withdrawal date.

Management expense ratio (MER)

0.7671%