 Good afternoon and welcome to FIG's Managed Income Portfolio Service overview. My name is Simon Michele and I'm the National Sales Manager for our Intermediary Services. And I'm here with Emma Jenkins, our Director of Managed Accounts. And we'd like to give you an overview of the latest innovation by FIG in providing easy and scalable access to the bond market for your clients. I will let you know that standard disclaimers apply, which you can see there. And importantly the Managed Income Portfolio Service at this stage is a product available to wholesale sophisticated classified investors with a minimum investment of $250,000. So the new Managed Income Portfolio Service is essentially improves the way that you can access direct bond ownership by providing more scalable alternative and bringing in a professional portfolio management team. Importantly, clients maintain direct ownership of their own bonds which are held in a custody account maintaining beneficial ownership for that investing entity and therefore providing the protection of both your coupon payments, providing your income stream and also the protection of your maturity dates. The portfolio management team essentially takes over the day to day management of your portfolio and aligns your clients with a professional portfolio management team which has access, institutional access to the entire bond market available and is able to act in a much more timely fashion to take advantage of opportunities. Essentially the Managed Income Portfolio Service provides expertise, transparency and scale through technology vastly improving the access to the bond market that's been there for many, many years but a much more easy way for advisors. Now I'd like to pass on to Emma who will run through an overview of the service. Great, thanks Simon. So taking a look at the main features of MIPS. So we have the discretionary portfolio management and the team is headed up by Owen Hung. So that team has discretion to look after your clients' portfolios. So the team looks at the macro environment, interest rates, inflation, economic growth, fiscal policy, credit spreads and to form a view on the asset allocation then they undertake analysis of the individual issuers' credit in order to create your clients' portfolios. The team will then monitor the companies to continually assess their performance in the bond's risk. They'll also be looking to increase returns where the right opportunities arise. The second element is the Transacting Services and this is really important in bond markets as Simon just touched on. So unlike equities where anyone can trade online this is still an over-the-counter market dominated by institutional investors. So the portfolio management team provide the MIPS investors with access alongside institutions and this is really key. Wherever they purchase the bonds in the market using their scale that prices pass straight through to investors so bonds are purchased and sold at cost. Then there's the custody admin and reporting and this is really about streamlining. So once you put your clients' money into MIPS we take care of the rest. So the portfolios are held in FIG custody. We look after all the administration. So this makes it really simple for you and scalable across your client base. Now transparency is really important so you've got continuous reporting online for your portfolios, for your client's portfolios and we also have data feeds as well so that you can integrate that into your reporting. So oversight and governance is key so you can have complete confidence in your clients' investments. So we have discretion to manage your clients' portfolios. So in order to put in appropriate checks and balances we've got three levels of governance. They are the portfolio management committee that looks at risk processes. The supervisory committee which is a majority independent committee and they're responsible for governance, returns, pricing and looking at the portfolio turnover. And finally we're also ordered to buy one of the large accounting firms as by the custodian but also for MIPS as well. So this provides you with a piece of money in handing over the discretion of your clients' money to MIPS portfolio management team. That's quite a lot of detail about how the MIPS investment works and I guess the key point here is that the MIPS team does all of this on behalf of your clients. So it provides a simple and convenient way for you to provide your clients with a direct portfolio fixed income that's professionally managed both from the risk perspective but also really importantly for the opportunity side as well. So we're creating something that's convenient, simple and scalable. So there are four investment programs for wholesale investors that you can select from. The portfolio management team spent a considerable amount of time creating these portfolios so that you can dial up or down the risk and return depending on your investor's profile. So the three predefined programs, the core income, this program provides regular income with low risk. It's a senior debt only portfolio so the top of the capital structure with a high allocation to investment-grade securities. The current target return of this portfolio is 4.25% net of fees. Now this is the baseline return with active management likely to add to this. Then we have the income plus so this offers a higher income within a moderate increase in risk. So this can include bonds from the whole capital structure so that's up and down the capital structure but also across the rating spectrum. So both rated and unrated bonds in this portfolio. As the portfolio investors can be invested in higher risk companies they're very carefully selected and monitored by the portfolio management team. So as mentioned there's a higher return with this portfolio and the current target return is 5.4% net of fees. Thirdly is the inflation linked investment program. This is an inflation hedge. Most investments across the markets are nominal i.e. payments are not linked to inflation. So this program invests in bonds linked to the headline inflation rate. The issuers are predominantly guvies and semi-governments and there are also some corporate bonds in this portfolio so it is a very conservative portfolio and the current target return is 3.3% net of fees on that portfolio. We also have the ability to customize for 5 million plus and this has particular appeal for groups or practices where you've got specific targets around rating, liquidity or ethical, social and governance overlays. So we can create that for an advisory group if you can make an aggregate of 5 million investment across your various clients. So now let's take a look at a case study of the types of MIPS investors. So here we have conservative investors Ryan and Amanda and they've been using TDs for income and as their defensive asset allocation but with the rate being offered by banks as low as 3% now it's not providing enough income. So we see many investors within a similar situation where they're looking to invest in bonds to create a higher income stream. However Ryan and Amanda don't know much about the bond market and they don't want to become the fixed income experts. They'd like to be able to travel without worrying about their investments and they've never invested in bonds. However they also use a managed account for equities. So they've seen the benefits of having that direct ownership with overlaying a professional management team. So they've got someone watching the markets at all time for them. Now for Ryan and Amanda they've chosen the core income program because it's got low capital volatility and it's providing a strong return of 4.2% net of fees and that's at least 1.2% over the best TD they can find. So it's really going to assist with meeting their living expenses. Taking a closer look at the core income investment program that Ryan and Amanda selected. So as I mentioned this is a conservative portfolio and you can see here that the majority of bonds are investment grade. So that's at least 85% of the portfolio has to be held in investment grade bonds. Looking at the July model portfolio created by the team all the bonds are rated in the triple B spectrum with the exception of SCT logistics which is unrated and represents just under 15% of the current portfolio. So this allocation to investment grade bonds will likely lead to lower price volatility. As mentioned the target return on this portfolio is 4.25% net of fees and again that's the baseline. So that's the current yield to maturity of the portfolio and the management of the team as opportunities arise in the market there may be a new issue in the rated space that has some real value and the portfolio management team can move very quickly to go and place a bid on behalf of all the core income investors to purchase a bond. Often in the fixed income markets it can have as quickly as 24 hours. So that's one thing we find that direct investors struggle to move fast enough whereas in this case you'd have the professional team acting on your behalf or your client's behalf. You'll also note that there's a mixture of fixed rate, floating rate and inflation link bonds and you'll notice there's an emphasis on fixed rate in the portfolio and that's the portfolio management team has a view that the current interest rate environment that rates are likely to be lower for longer so fixed rate bonds offer good known income streams for investors in that scenario. Then just to talk a little bit more about who the portfolio management team are. So it's headed up as I mentioned by Owen Hung. Owen has over 17 years experience and he's worked in New York, London, Hong Kong and Sydney and he joined FIG 12 months ago to set up the MIPS investment programs and the portfolio management team. Owen has a really strong background in analyzing credit worthiness of companies and that's really a key skill that he brings to these portfolios to select and manage your client's assets. So his favorite bond at the moment and I'll just run you through his thinking on this is SCT logistics. So SCT has issued a fixed rate bond with a 7.65% coupon and it matures on the 24th of June 2021. This bond is currently in both the core income and the income plus target portfolios. So what makes Owen and his team like this bond? Well to summarize he likes the industry, the business and the outlook for SCT. So SCT is a national model transport and logistics company and it's a well established business with family management and a strong market share. It's a concentrated industry with high barriers to entry and they have consistent and predictable revenue streams with long dated contracts and many key relationships that they've had for a long time. So this is really good for bond holders as it impacts positively on their ability to pay the interest payments when they fought due. The teams also looked at the strength of the balance sheet which is their ability to repay the debt at maturity or refinance and there are strong balance sheet ratios. So having established the strength of the business, the balance sheet and liquidity, so that's a big tick on the credit front, the team then look at other opportunities in the market to work out if it offers additional value. Looking at similar credit profiles they see that the yield to maturity on the SCT at the moment is 7.25% and comparable bonds are around about 5.5% to 6%. So there's a fair amount of outperformance there and that's really the view of the team based on all the credit work that they've done. And in the unrated space where there's less of transparency in terms of the number of investors and sometimes the companies for single investors, having that professional team looking into meeting management is really keen. So just handing back to Simon to run through the key benefits. Thank you very much Emma. Before I move on I will just mention we've got a couple of questions from people you can type in questions if you like and if you have some time at the end of the presentation we'll certainly look at to answer a couple of those. So feel free to use your box to type in a question if you would like. So I suppose the real purpose of the managed income portfolio service is to make it a lot more easier and efficient to access direct bond ownership and to continue to manage that without necessarily becoming an expert in fixed income yourself. It's really about asset allocation and the protections of bonds as defensive assets in your portfolio. The portfolio management team are the experts there doing their own credit analysis. They're looking at opportunities in the market and they're able to use the scale of the managed income portfolio service to access new issues for example that generally turn around within 24 hours and it's just a lot more difficult for investors to access those opportunities unless you are aligned as the managed income portfolio service does as an institutional investor underneath the portfolio management team. Obviously being able to integrate through daily data feeds into your own reporting platforms for your clients as well as the ability to move to go online to my thing our secure online website reporting platform and generate cash flow, risk reports, portfolio reports very much the same experiences our clients have had existing in the direct bond portfolio. As I said the protection of owning your own bonds and being able to see exactly where your exposure lies and what bonds are a part of your current portfolio and bringing in an additional level of transparency by moving away from that traditional buy sell spread in the market to a flat management fee allowing you to determine the value of the service being provided. So it's really about taking a lot of the hassle out of it. Moving to next steps for example you can look at the offer document which is the information memorandum choose your clients investment program one of the three that Emma outlaid all you may look at a customized one. Once we receive that documentation in we will then establish a custody account and a linked funding account in the name of the investor. Once that funding account receives money it is then up to the portfolio management team to take the day-to-day management of that portfolio and they will over 30 days deploy those funds by purchasing a bond portfolio within that investment program for each of your clients and then manage that on an ongoing basis providing daily data feeds and regular quarterly and reporting back to you. But at any time 24-7 you can certainly go online and see your clients individual holdings and custody accounts and generate cash flow reporting from those as well. For any information we do have a website you can see the address for that page it's fig.com.au slash MIPS underscore intermediary. You can generate or download an information memorandum document from there or you can call our 1300 number 1-300-752-663 and that will connect you through to one of our business development managers depending upon the location of which you're calling and you can talk to them directly about the managing come portfolio service request, additional information or maybe request a meeting with one of the DPDMS to come out and have a sit down with you face-to-face and go over the product so I would definitely recommend if you would like a little bit more detail to come through and contact us. We've got a couple of minutes just left so I might just hit a couple of the questions that have come through. One of them has come through from Margaret and she's asking around the timing of distributions. That's great. So these are directly held bonds beneficially held in your clients' names so you have two options on their behalf. One is to sweep the interest or the coupon payments out to an external account so that they can be used for living expenses which to the extent that the client doesn't need the funds at this stage it can be reinvested by the MIPS portfolio management team. So as soon as those coupons hit our account they go back out to the funding account within a day or so they'll be in your clients' hands. Fantastic. Thank you very much. We've had another question come in from Giuseppe who's asked whether we have sample portfolios we can share and also just the average portfolio turnover per annum. Great. Yes, we definitely have portfolios we can share. We've given you the headline numbers but for that we'd ask that you call and speak to a BDM and they can provide you with that information and the current target portfolios as well. In terms of turnover we have a soft limit of 35% turnover per annum and the reason for that is that it's a soft limit not a hard limit is there may be circumstances in the market where you want a greater turnover than that. So you know like a global financial crisis type event but that limit in order to breach it the portfolio management team needs to put together a case and take that to the supervisory committee to get sign off to go over that 35%. Thank you very much everyone. I'll just hit you with one last question before we go and it's from Trevor and Trevor's just asking in relation to the programs. Can you spread, can you use more than one program? Yes you can. Minimum investment in each program is $250,000 so what we've commonly seen is where investors will put $250,000 in the inflation linked and then maybe $250,000 in the core income and some clients have even spread across all three so it just really depends on what profile of the individual client and what the advice is attempting to achieve on their behalf in both terms of risk profile and the income generated. Fantastic well thank you very much for that we might call an end to the webinar there. We will have this available via a recording. Please feel free to contact us via our BDMs on that 1-300-752-663 number.