Frequently asked questions: Intelligent Investor Growth Fund (ASX:IIGF)

The Intelligent Investor Australian Equity Growth Fund is a share portfolio of the Intelligent Investor analyst teams’ best growth ideas. It is unconstrained by company size or thematic mandate and represents the analyst teams stock picking ability.

As it is closing soon, we thought it was best to address some frequently asked questions about the fund. Additionally, Nathan Bell, the Portfolio Manager held a webinar discussing the fund, the stock selection process, and several companies in the fund. A recording of this can be found below.

WEBINAR RECORDING

The structure:

What happens if the market declines between now and when the fund lists? Will my initial investment be worth less? No. When the fund lists it will be 100% cash and the units will be $2.50 each. On the first day of listing the investment team will start deploying the cash into the holdings and then the unit price will reflect the movement in value of the holdings.

Will the portfolio trade at a premium or discount depending on the demand for units once it is listed? No, the fund will trade at its net asset value and the market maker will provide liquidity by creating and redeeming units at the buy/sell price. It will not trade a premium or discount to its net asset value. The fund is not a closed ended structure like a listed investment company or a listed investment trust.

How liquid will the fund be? It looks like the other two Intelligent Investor funds do not trade often. The daily volume isn't indicative of the funds liquidity. The fund has a market maker that creates and redeems units when required. This is a managed fund, not a closed ended structure like an LIC. 

As an example,login to your share trading account when the market is open and have a look at  the depth on the screen for Intelligent Investor Ethical Share Fund (INES). You will generally see a "buyer" and a "seller" with 100,000 units sitting on the screen a cent or two apart from each other. This is the market maker creating a market around the indicative net asset value (NAV). If someone comes along and tries to buy a parcel of more than 100,000 units it’s the market makers responsibility to create additional liquidity in a timely manner.

When assessing the liquidity of an ETF or actively managed fund on the ASX it is important to look at the liquidity of the underlying stocks the fund holds.

How is the Intelligent Investor Growth Fund different to the InvestSMART Diversified Growth Portfolio? The InvestSMART Diversified Growth Portfolio invests in a mixture of asset classes covering Australian shares, international shares, property, infrastructure, bonds and cash. The Intelligent Investor Growth Fund invests only in Australian shares hand picked by the Intelligent Investor analyst team with the aim of beating the market. Click here for a more detailed explanation including the differences in investment structure and aim of each investment.

The application process:

How do I apply? Click this link or click the link in the banner at the top of every page to be taken to the initial offer page. There you will be able to apply online.

Why should I provide my HIN? If you supply the HIN for your brokerage account you investment in IIGF will be automatically pulled through to your brokerage account making it easy to manage and transact upon in the future.

In the application it asks for account designation, what is this? You will be asked for your account designation if you supply a HIN. This is how your full name or SMSF name etc. appears on your CHESS statements. For example an SMSF with a company as trustee would appear as SMITH FAMILY PTY LTD <SMITH FAMILY S/F A/C>. 

How do I pay and when do I have to pay? BPAY. Once your application has been submitted you will receive the BPAY biller code and your reference number. You must make the BPAY transfer no later than the 25^th of September

I have already applied and funded; can I add more? Yes, if you would like to add more you just use the BPAY details from your application. You will be allocated units for the amount you send through.

How do I change my distribution to be reinvested or paid out? The default setting is for distributions to be reinvested. If you want to change this to have the distributions paid out or you want to change any of your details such as mailing address or email address you will be able to do so via the share registry www.registrydirect.com.au.