Platinum Asia Fund (Quoted Managed Hedge Fund) (ASX code: PAXX)

Quoted on the ASX and accessible through licensed brokers, PAXX provides a simple and convenient means for investors to gain exposure to an actively managed, diversified portfolio of Asian (ex-Japan) companies across industry sectors.

Investment objective:
To provide capital growth over the long-term by providing exposure to undervalued listed investments in the Asian region (excluding Japan).

Key benefits:

  • Access to a manager with a proven investment philosophy and method for selecting undervalued stocks and a team of experienced investment professionals
  • Exposure to an actively managed, diversified equity portfolio that seeks to minimise losses during market downturns using risk management techniques
  • Actively managed currency exposures providing substantial diversification from the Australian dollar
  • Annual distribution of the fund’s net income, including net realised capital gains
  • Ease of access through licensed brokers without lengthy paperwork and with no set minimum transaction amount
  • Ability to buy and sell units at any time during ASX trading hours with the knowledge of real-time indicative NAV per unit before placing a trade

 

  • Portfolio manager(s):
    Dr Joseph Lai

    Portfolio Manager

    It has been many years since Joe last held a stethoscope and examined patients in a hospital, but what his early experience as a.. More

About Quoted Managed Funds

What is the Platinum Asia Fund (Quoted Managed Hedge Fund) (ASX code: PAXX)?

PAXX is an Australian registered managed investment scheme. Its units are quoted on the Australian Securities Exchange (ASX) under the ASX AQUA Rules.

PAXX is an ASX-quoted version of our unlisted managed fund, the Platinum Asia Fund (PAF). PAXX will feed into PAF, giving investors access to PAF's portfolio composition, portfolio managers and investment strategies. The returns of PAXX may vary slightly from the returns of PAF's performance fee P Class due to different cash holdings as well as gains and losses arising as a result of PAXX's market making activities.

What are the key advantages of a quoted actively managed fund?

  • Ease of access through licensed brokers without the need to complete the forms and associated paperwork that are typically required for unlisted managed funds.
  • Ability to buy and sell units at any time during ASX trading hours with the knowledge of real-time indicative NAV unit price before placing a trade.

How do quoted actively managed funds such as PAXX differ from an ETF or a LIC?

Actively managed quoted funds such as PAXX have a unit trust structure and are open-ended, which means that new units are issued and existing units are cancelled based on investor demand and capital flows.

A typical Australian exchange traded fund (ETF) likewise has a trust structure and is open-ended, but is not actively managed. Instead, an ETF tracks a market index.

Listed investment companies (LICs) are closed-ended investment vehicles that are established in the form of a company. They do not regularly issue new shares or cancel existing shares, and so their cash flows and hence investment decisions are not impacted by daily fund inflows and outflows (as is the case for managed funds). However, the share price of a LIC can (and often does) differ from the underlying value of the LIC’s portfolio of investments.

How can investors buy and sell units in PAXX?

Units in ASX-quoted managed funds trade, clear and settle in the same way as do shares in ASX-listed companies, and therefore can be bought and sold through any licensed stockbroker.

Investors do not need to complete an application form or withdrawal form. There is no requirement of minimum number of units or dollar amount for a trade.

What paperwork is required to invest in PAXX?

None, if you have an existing stockbroking account.

At what price will investors be buying or selling units in PAXX? What is iNAV?

Prices are live and reflect investor demand and supply. However, the market maker will add liquidity during the ASX trading day such that the price at which Platinum may buy and sell units reflects Platinum's view of the net asset value per unit (as referenced by the indicative net asset value (iNAV) per unit), market conditions and supply and demand for the units during the ASX trading day. The iNAV is calculated and updated throughout the ASX trading day, having regard to the underlying fund’s portfolio holdings and foreign exchange movements.

The actual net asset values (NAV) per unit of PIXX are calculated and published each
Business Day
Every day on which banks are open for business in Sydney, Australia, except Saturday, Sunday and a public holiday.
under normal market conditions.

The iNAV and NAV per unit of PIXX are published on Platinum's website (see top of this page).

The actual price at which units in PIXX are traded on the ASX AQUA market may not reflect either the NAV per unit or the iNAV per unit of the fund.

What is the market making function often referred to in a quoted actively managed fund?

Market makers do exactly as their name suggests, i.e. they make markets by matching buy and sell orders for investors that want to trade units in the fund. The market maker provides liquidity to the market by providing quotes throughout the trading day and updating their prices to reflect changes in the underlying securities, market conditions and the supply and demand for the units during the ASX trading day. Platinum has engaged Deutsche Securities Australia Limited as its market making agent for PAXX.

What are the fees for PAXX?

PAXX has a management fee of 1.10% p.a. plus a performance fee of 15% of the amount by which PAXX’s return (after management fees) exceeds the return of its nominated benchmark, the MSCI All Country Asia ex-Japan Net Index (A$).1 This fee is in line with the fee structure for Platinum's two listed investment companies, Platinum Capital Limited (ASX: PMC) and Platinum Asia Investment Limited (ASX: PAI).

1 The management fee and performance fee are stated inclusive of Australian GST less any expected reduced input tax credits. The performance fee is subject to a high water mark, which means that any underperformance relative to the benchmark, including underperformance from any prior calculation period, must be recovered before a performance fee can be recognised in NAV.

Who should I talk to if I have any questions about PAXX?

For all fund related enquiries, please contact Platinum.

For enquiries about your holdings in PAXX, please contact the Unit Registry, Link Market Services on +61 1300 554 474 or via registrars@linkmarketservices.com.au.

Link Market Services can provide assistance with the following:
  • Update the name or address on the holding

  • Provide bank details, DRP, email address or TFN instructions

  • Request for forms to be emailed or posted

  • Transaction history (as at settlement date)

  • Off market transfer & holding merge queries

  • Guidance and assistance with the online Link Investor Centre

  • Guidance and assistance completing & submitting Link forms

  • Statement replacements

  • Payment replacements




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NAV History & Distributions

Net Asset Value (NAV) Per Unit History

Distribution History

The distributions shown above are historical and no warranty can be given for future distributions.

Understanding distributions

The distribution for the fund will comprise income earned by the fund (including distributions paid from the underlying fund) less expenses incurred by the fund (such as management costs) plus net capital gains (if any). If there is no net income or net capital gains earned in a particular distribution period, the fund may not pay a distribution in respect of that distribution period. In some circumstances, the fund may distribute a payment out of capital in addition to, or instead of, a distribution of net income or net capital gains.

The distribution investors may receive will be based on the number of units they hold in the fund at the nominated record date. It is not pro-rated according to the time that investors have held their units

Distributions will be paid directly into investors’ Australian dollar or New Zealand dollar bank accounts (as applicable). Investors should contact their stockbroker to ask how they can provide bank account details or otherwise they can provide their bank account details online via the Unit Registry’s website at www.linkmarketservices.com.au. Investors may also provide bank details by submitting a form which is available from the Unit Registry.

Alternatively, investors can choose to have their distributions re-invested as additional units in the fund, subject to the terms and conditions of the fund’s distribution reinvestment plan. Information about the funds’ distribution reinvestment plan will be made available at www.platinum.com.au. Elections to participate in the distribution reinvestment plan must be made by the election date announced by Platinum in respect of each relevant distribution.

The fund’s Constitution permits Platinum to require that investors’ distributions be reinvested as additional units in the fund. However, we will provide a notification on our website if, in relation to a particular distribution, we have elected to require the reinvestment of the distribution.

Investors can elect to participate in the distribution reinvestment plan online via the Unit Registry’s website at www.linkmarketservices.com.au or by submitting a form available from the Unit Registry.

Distribution Reinvestment Plan

PAXX has in place an active Distribution Reinvestment Plan (DRP) which provides investors with an optional and convenient service to acquire additional units in PAXX by automatically reinvesting all or part of their 30 June annual distribution.

ASX Releases & Updates

ASX Announcements

Monthly Updates

Quarterly Investment Manager’s Reports

Distribution and Tax Statements

Financial Statements

Investment Strategy

PAXX is a feeder fund. It invests in units in its underlying fund, the unlisted Platinum Asia Fund (PAF). PAF, in turn, primarily invests in listed securities of Asian companies.

PAF's portfolio will ideally consist of 50 to 100 securities that Platinum believes to be undervalued by the market. Cash may be held when undervalued securities cannot be found. However, the portfolio typically has 50% or more net equity exposure. Platinum may short-sell securities that it considers overvalued.

PAXX’s returns may vary slightly from PAF’s performance fee P Class returns due to different cash holdings as well as and gains and losses arising as a result of PAXX's market making activities.

The key investment guidelines for PAF are summarised below. For further details, please refer to the latest Product Disclosure Statement.

Suggested time horizon 5 or more years
Geographic limits The fund may invest in Asian companies (including Asian companies with securities listed on securities exchanges other than those in Asia), companies that are not listed in Asia but where their predominant business is conducted in Asia, and companies that benefit from exposure to the Asian economic region.
Platinum defines “Asia” as all countries that occupy the eastern part of the Eurasian landmass (separated from Europe by the Ural Mountains) and its adjacent islands, including the Russian Far East, and excluding Japan.
The fund may invest in companies based in China, Hong Kong, Taiwan, Korea, Malaysia, Singapore, India, Thailand, Indonesia, Philippines, Sri Lanka, Pakistan and Vietnam.
Industry/sector limits N/A
Number of securities in portfolio Typically 50 to 100 securities
Net equity exposure Typically 50% or more of the fund’s net asset value
Cash holdings
  • Typical range: 0 – 40% of the fund’s net asset value
  • Permissible range: 0 – 100% of the fund’s net asset value
Limits on individual security holdings The fund will seldom invest more than 5% of its net asset value in the securities of a single issuer.
Short-selling Subject to the limits on leverage and the use of derivatives, the fund may short-sell securities and indices for risk management purposes or as a way to take opportunities to increase returns.
See Platinum’s risk management strategies for further details.
Currency
  • The fund’s currency exposures are actively managed with the aim of capturing the returns and minimising the risks arising from the fund’s exposure to foreign currency fluctuations, which can change the value of the equity investments measured in the fund’s reporting currency (AUD).
  • Platinum may manage the fund’s currency exposures using foreign exchange forwards, swaps, non-deliverable forwards, currency options and spot foreign exchange trades.
See Platinum’s risk management strategies for further details.
Leverage
  • The fund does not borrow funds (except for short-term overdrafts for trade settlement), though borrowing is permitted under the fund’s constitution.
  • The fund may be leveraged through the use of derivatives (see below for detail).
Derivatives
  • The fund may use financial derivative instruments for risk management purposes and/or as a way to take opportunities to increase returns, to gain access to markets not readily available to foreign investors and/or to establish short positions.
  • Both over-the-counter (OTC) derivatives and exchange-traded derivatives are permitted. Aggregate exposure to all OTC derivative counterparties will typically be no more than 5% of the fund’s net asset value, and in any event will not exceed 10% of the fund’s net asset value.
  • The underlying value of the fund’s derivative positions1 will not exceed 100% of the fund’s net asset value.
  • The fund’s gross exposure, taking into account all physical securities positions and long and short derivatives,1 will not exceed 150% of the fund’s net asset value.
See Platinum’s risk management strategies for further details.
1 Where options are employed, the underlying value will be the Delta-adjusted exposure. “Delta” is the theoretical measure of the sensitivity of the option price to a chance in the price of the underlying asset (usually expressed as a percentage).
Securities lending Not undertaken, although permitted under the fund’s constitution.
 

Portfolio Snapshot

Industry Breakdown (of Platinum Asia Fund)1
SectorLong %Net %
Financials 20.6 20.6
Information Technology 18.5 18.5
Consumer Discretionary 14.9 14.9
Industrials 8.4 8.4
Consumer Staples 6.8 6.8
Materials 6.4 6.4
Real Estate 5.8 5.8
Energy 4.2 4.2
Health Care 3.1 3.1
Utilities 3.0 3.0
Telecom Services 2.0 2.0
Other 0.6 0.6
Top 10 Positions (of Platinum Asia Fund)3
StockCOUNTRYINDUSTRY%
Alibaba Group China Ex PRC Information Technology 3.9
Ping An Insurance (Group) Co of China Ltd - A shares China Financials 3.6
Midea Group Co Ltd China Consumer Discretionary 3.3
Jiangsu Yanghe Brewery JSC Ltd China Consumer Staples 3.1
Axis Bank Ltd India Financials 3.0
China Merchants Bank Co Ltd China Ex PRC Financials 3.0
Kasikornbank PCL Thailand Financials 2.9
Samsung Electronics Co Ltd Korea Information Technology 2.8
Ayala Corp Philippines Real Estate 2.8
Tencent Holdings Ltd China Ex PRC Information Technology 2.5
Disposition of Assets (of Platinum Asia Fund)2
Long %Net %Currency%
China 11.3 11.3 13.8
China Ex PRC 44.4 44.4 -
Hong Kong 3.1 3.1 35.6
Taiwan 2.1 2.1 2.2
India 10.9 10.9 11.5
Indonesia 0.4 0.4 0.5
Korea 10.2 10.2 10.2
Malaysia 0.5 0.5 0.6
Philippines 3.4 3.4 3.4
Singapore 0.9 0.9 -
Thailand 4.7 4.7 4.7
Vietnam 2.4 2.4 2.4
Australian Dollar - - 0.3
UK Pound Sterling - - 0.1
United States Dollar - - 14.7
Long - 81 stocks, 3 swaps.
Top 10 Positions (of Platinum Asia Fund)3
StockCOUNTRYINDUSTRY%
Alibaba Group China Ex PRC Information Technology 3.9
Ping An Insurance (Group) Co of China Ltd - A shares China Financials 3.6
Midea Group Co Ltd China Consumer Discretionary 3.3
Jiangsu Yanghe Brewery JSC Ltd China Consumer Staples 3.1
Axis Bank Ltd India Financials 3.0
China Merchants Bank Co Ltd China Ex PRC Financials 3.0
Kasikornbank PCL Thailand Financials 2.9
Samsung Electronics Co Ltd Korea Information Technology 2.8
Ayala Corp Philippines Real Estate 2.8
Tencent Holdings Ltd China Ex PRC Information Technology 2.5
All data as at [31 October 2017] .
  1. “Long %” represents the Platinum Asia Fund’s exposure to physical holdings and long derivatives (of stocks and indices) as a percentage of its net asset value. “Net %” represents the Platinum Asia Fund’s exposure to physical holdings and both long and short derivatives (of stocks and indices) as a percentage of its net asset value.
  2. “Long %” represents the Platinum Asia Fund’s exposure to physical holdings and long derivatives (of stocks and indices) as a percentage of its NAV. “Net %” represents the Platinum Asia Fund’s exposure to physical holdings and both long and short derivatives (of stocks and indices) as a percentage of its NAV. “Currency %” represents the Platinum Asia Fund’s currency exposure as a percentage of its NAV, taking into account currency hedging.
  3. The “Top 10 Positions” table shows the Platinum Asia Fund’s top 10 long stock positions (through physical holdings and long derivatives) as a percentage of its net asset value.