Frequently Asked Questions

Listed below are responses to a number of frequently asked questions from prospective and current shareholders:

QUICK FACTS

Fund Name: QV Equities Limited

Ticker: QVE

Launch date: 22 Aug 2014

Exchange: ASX

Domicile: Australian

Category: ASX 300 ex 20

Currency/ Traded Currency: AUD

Registrant Company: LINK MARKET SERVICES LIMITED

Manager/ Fund Management Company: IML

Annual management fees: 0.9% of the NAV up to $150m, 0.75% $150m

Head & Registered Office: Level 24, 25 Bligh Street, SYDNEY, NSW, AUSTRALIA, 2000

Fund Managers: Anton Tagliaferro and Simon Conn

1. Does QVE intend to pay a dividend?

QV Equities intends to pay a dividend to Shareholders quarterly.

The amount of the dividend will be at the discretion of the Board and will depend on a number of factors, including future earnings, capital requirements, financial conditions, future prospects and other factors that the Board deem relevant. It is the current Board policy that all dividends paid to Shareholders will be franked to 100% or to the maximum extent possible.

Dividend announcements can be found HERE

2. What is the management fee?

The Manager (IML) is entitled to be paid a management fee equal to 0.9% per annum (plus GST) of the Portfolio Net Asset Value for the first $150 million and then 0.75% (plus GST) per annum thereafter. The management fee is calculated and accrued on the last day of each month and paid at the end of each month in arrears.

The management fee will therefore equate to roughly 0.875%, ie 0.9% on the first $150m and 0.75% thereafter. Although QVE has not done any in-depth analysis on the ICR going forward it is expected that there will be approx 0.25% in operating costs giving an estimated ICR of 1.125%. Please note this is an estimate only.

3. What is the current portfolio spread?

The manager will only invest in companies which satisfied IML’s stock selection criteria of identifying companies with a strong competitive advantage, recurring earnings, run by capable management that can grow and which we consider are trading at a reasonable price. With the Australian sharemarket at 6 year highs and with continued economic uncertainties and geopolitical crises in various parts of the world, IML expects some volatility in the months ahead and is looking to buy quality stocks at reasonable prices.

QV Equities continues to believe that there are many quality companies in the ASX 300 ex 20 space that will be worthwhile investments in the years ahead and has confidence in our Manager’s discretion and expertise to identify and purchase these companies for the portfolio at reasonable prices.

The Latest NTA report where the portfolio spread is summarised and detail stocks purchased by the manager so far.

Going forward this report will be more and more detailed once QVE is fully invested in the market with top 10s reported and stock positions discussed, however at no time will QVE be disclosing all holdings.

You can also view QV Equities investment update videos which detail our investment ideas and where we are finding value in the market.

4. What is the composition of the board?

QVE has a Diversity Policy in place and going forward, we will be striving to meet the terms of that Policy.

By way of background, QVE being a Listed Investment Company, does not have any employees. All of the investments, marketing and operations are undertaken by employees of IML (the Manager).The Non-Executive Directors were specifically chosen due to their excellent standing within the Investments industry, while the two Executive Directors are employees of the Manager. The Company Secretary, Zac Azzi, is also an employee of the Manager.

5. Do we consider the sustainability of our investments?

IML recognises the importance of responsible investment, the impact that it can have on our client portfolios, and the broader power to shape society at large. We believe that we have a fiduciary duty to act in our clients’ best interests, and that integrating environmental, social and governance (ESG) considerations into our investment decisions, as well as engaging with investee companies to positively influence corporate behaviour, are key components of exercising this duty.

IML seeks to invest in entities that have four clear characteristics:

• A competitive advantage over their peers;
• Recurring, predictable earnings;
• A capable management team; and
• The ability to grow over time.

In doing this, IML also takes into account ESG factors as part of its investment process through its Responsible Investment Policy. In doing so, it looks to build a long term portfolio of entities that have sustainable future earnings which enables the payment of dividends and reinvestment back into their businesses for future growth.

6. What is the difference between Issuer Sponsored and Chess Sponsored share holdings?