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MACQUARIE UNIT TRUST SERIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
4 Financial risk management (continued)
a) Strategies in using financial instruments (continued)
The Sub-Fund may invest up to 30% of its net assets in the Macquarie IPO China Concentrated Core Fund,
i.e. the Indirect Portfolio. The Direct Portfolio may also acquire IPO Securities that are within the eligible
universe of the Macquarie IPO China Concentrated Core Fund and the investments in the Direct and Indirect
Portfolio will in aggregate comply with investment restrictions applicable to the Sub-Fund. The Manager, in
its capacity as the manager of the Macquarie IPO China Concentrated Core Fund, will not be entitled to any
preliminary charge, management fee, administration fee and performance fee (if any) payable in respect of
any component of the Sub-Fund that is invested in the Macquarie IPO China Concentrated Core Fund.
The Sub-Fund’s investments in the Macquarie IPO China Concentrated Core Fund shall be the only
investment by the Sub-Fund in other collective investment schemes.
Macquarie Asia New Stars Fund
Investment objective
The investment objective of the Macquarie Asia New Stars Fund is to provide unitholders with exposure
returns from:
• Small market capitalisation equity securities with exposure to any one or more countries within Asia.
• Initial public offerings and newly listed small market capitalisation equity securities with exposure to any
one or more countries within Asia.
Policies and processes
The investment portfolio includes small market capitalisation equity securities as defined by the Manager.
The Manager selects the equity securities based on both quantitative and qualitative investment techniques.
In respect of the investments in initial public offerings or those recently listed, if allocations from initial public
offerings are limited, the Manager will purchase the shortfall of the targeted equity securities from the stock
exchanges after listing. The Manager intends to hold up to 30 recently listed equity securities, comprising up
to 30% of the total investment balance, whereby each equity security may have a weighting up to 7.5% of the
total investment balance.
The Manager may utilize several risk management filters to manage the market risk by limiting up to 147
investment positions in equity securities each with a maximum weighting of 7.5% of the total investment
balance. The Manager may diversify the level of concentration in investments in equity securities in terms of
geographic region and market sector.
b) Market risk
i) Price risk
Market price risk is the risk that the value of the investments held by the respective Sub-Funds will fluctuate
as a result of changes in market prices.
Price risk is monitored by the Manager on an ongoing basis and is managed primarily through the
diversification of the investment portfolio and other policies as follows:
• Overall portfolio exposure – managed by ensuring that the overall exposure of the portfolio is in
compliance with the investment objective of the respective Sub-Funds;
• Stocks limits – manage exposure to any single stock and ensure diversification; and
• Country limits – manage exposure to any single country and ensure diversification across allowable
countries.
Each of the Sub-Funds’ investments in equity securities and investments held through the collective
investment scheme are substantially publicly traded. The Sub-Funds are not directly correlated with any
particular stock market indices. The Manager makes stock selections and monitors each of the Sub-Funds’
investment portfolios.
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