MERCER MULTI-M ANAGER FUNDS · 2019-07-24 · Booklet. Indirect investors should refer to the...

Issued by Mercer Investments (Australia) Limited (MIAL) ABN 66 008 612 397, Australian FinancialServices Licence #244385 as the Responsible Entity of the Mercer Multi-Manager Funds:GPO Box 9946, Melbourne, VIC 3001. Tel 03 9623 5555.MIAL is a wholly owned subsidiary of Mercer (Australia) Pty Ltd ABN 32 005 315 917.“MERCER” is an Australian registered trademark of Mercer (Australia) Pty Ltd.

M E R C E RM U L T I - M A N A G E RF U N D SA D D I T I O N A L I N F O R M AT I O NB O O K L E T

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S T A Y I N G U P T O D A T ESome of the information contained in this Additional Information Booklet(‘Booklet’) may change from time to time. Where the updated informationis not materially adverse information, investors can obtain a copy at any timeby visiting mercer.com.au/mmf or calling 1300 728 928.

We can also send you a copy of the updated information on request free of charge.

Direct investors will be advised of material changes and significant events asrequired by law. See Material changes or significant events on page 22 of thisBooklet.

Indirect investors should refer to the disclosure document for their Servicefor information about staying up to date.

T H E R E S P O N S I B L E E N T I T Y ’ SC O N T A C T D E T A I L SMercer Investments (Australia) LimitedGPO Box 9946, Melbourne VIC 3001Telephone: 1300 728 928mercer.com.au/mmf

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CONTENTS

ABOUT THIS ADDITIONAL INFORMATION BOOKLET ................................................................. 2

HOW WE INVEST ........................................................................................................................ 4

KEY RISKS .................................................................................................................................. 8

ADDITIONAL EXPLANATION OF FEES AND COSTS ..................................................................... 11

TAXATION ................................................................................................................................. 14

OTHER THINGS YOU SHOULD KNOW ........................................................................................ 18

HOW TO INVEST AND TRANSACT ON YOUR ACCOUNT ............................................................ 25

GLOSSARY ............................................................................................................................... 29

YOUR PRIVACY

We collect, disclose, use and hold certain personal information about direct investors*. We understand thatby holding this information we have obligations to investors as to the manner in which we deal with thatinformation. We comply with the Australian Privacy Principles as described in the Privacy Act 1988 (Cth asamended). Mercer (Australia) Pty Ltd has a Privacy Policy that describes in more detail the manner in whichwe will deal with investors’ personal information. Our Privacy Policy is available to view at mercer.com.au oryou can request a copy by calling 1300 728 928. See Privacy information for direct investors on page 22 ofthis Booklet for more information.

We will not receive or hold any personal information about indirect investors* who are investing through aService*.

* See the Glossary on page 29 for definitions.

MERCER MULTI-MANAGER FUNDS

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ABOUT THIS ADDITIONAL INFORMATION BOOKLETThe information in this Additional Information Booklet (‘Booklet’) forms part of the followingProduct Disclosure Statements (‘PDSs’).

PDS DATESINGLE SECTORSHARESMercer Australian Shares Fund 4 January 2019Mercer Australian Shares Plus Fund 4 January 2019Mercer Passive Australian Shares Fund 4 January 2019Mercer Socially Responsible Australian Shares Fund 4 January 2019Mercer Australian Small Companies Fund 4 January 2019Mercer Australian Shares Fund for Tax Exempt Investors 4 January 2019Mercer International Shares Fund 4 January 2019Mercer Passive International Shares Fund 4 January 2019Mercer Hedged International Shares Fund 4 January 2019Mercer Passive Hedged International Shares Fund 4 January 2019Mercer Socially Responsible Global Shares Fund – Unhedged Units 15 June 2018Mercer Socially Responsible Global Shares Fund – Hedged Units 15 June 2018Mercer Global Small Companies Shares Fund 4 January 2019Mercer Emerging Markets Shares Fund 4 January 2019Mercer Passive Emerging Markets Shares Fund 4 January 2019REAL ASSETSMercer Passive Australian Listed Property Fund 4 January 2019Mercer Global Listed Property Fund 4 January 2019Mercer Passive Global Listed Property Fund 4 January 2019Mercer Global Listed Infrastructure Fund 4 January 2019Mercer Passive Global Listed Infrastructure Fund 4 January 2019FIXED INTEREST AND CASHMercer Australian Sovereign Bond Fund – Class 1 1 July 2019Mercer Global Sovereign Bond Fund 1 July 2017Mercer Australian Inflation Plus Fund 10 May 2019Mercer Global Credit Fund 4 January 2019Mercer Emerging Markets Debt Fund 4 January 2019Mercer Cash Fund – Cash Units 1 July 2017Mercer Cash Fund – Term Deposit Units 1 July 2017DIVERSIFIEDMercer Diversified Shares Fund 4 January 2019Mercer High Growth Fund 4 January 2019Mercer Growth Fund – Active Units 1 July 2019Mercer Growth Fund – Enhanced Passive Units 1 July 2019Mercer Moderate Growth Fund – Active Units 1 July 2019Mercer Moderate Growth Fund – Enhanced Passive Units 1 July 2019Mercer Conservative Growth Fund – Active Units 1 July 2019Mercer Conservative Growth Fund – Enhanced Passive Units 1 July 2019Mercer Income Plus Fund 12 March 2019

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About this Booklet

This Booklet provides an outline of the mainfeatures and benefits of the Mercer Multi-ManagerFunds. It should be read carefully before you makean investment decision and must be read along withthe Product Disclosure Statement for the relevantMercer Multi-Manager Fund. In this Booklet:

� ‘You’ refers to any investor, whether direct orindirect.

� ‘Fund’ refers to a registered managedinvestment scheme and Classes within thatscheme.

� ‘PDS’ means the Product Disclosure Statementapplicable to the relevant Fund or the relevantclass of units in the Fund (the Class).

For an explanation of the other terms used in thisBooklet refer to the Glossary on page 29.

The Booklet is designed for both direct investorsand indirect investors (investing via a Service).Investors accessing the Mercer Multi-ManagerFunds through a Service become an indirectinvestor in the Funds, as the provider of yourService (Service Provider) holds units in the Fundon your behalf. See Other things you should know(page 18) and How to invest and transact on youraccount (page 25) for more information.

The information contained in this Booklet is generalinformation only and does not take into accountyour individual financial objectives, financialsituation or needs. We recommend that you speakto a licensed, or appropriately authorised, financialadvisor if you need help making an investmentdecision.

If you accessed a copy of this Bookletelectronically and would like a paper copy, pleasecontact us and we will send you one free of charge.

About the Responsible Entity

The Responsible Entity, Mercer Investments(Australia) Limited, is a wholly owned subsidiary ofMercer (Australia) Pty Ltd, which is part of theMercer group of companies (‘Mercer’). Moreinformation about the Responsible Entity isprovided in the PDS for each Fund or Class.

The Responsible Entity is the issuer of this Bookletand the Product Disclosure Statements to which itrelates.

About the Mercer Multi-Manager Funds

The Mercer Multi-Manager Funds are a series ofunit trusts that are registered managed investmentschemes under the Corporations Act 2001 (Cth).They are referred to as the ‘Mercer Multi-ManagerFunds’ or the ‘Funds’ throughout this Booklet.

The value of investments in the Funds may rise andfall from time to time. None of the ResponsibleEntity, any of the other Marsh & McLennanCompanies, nor any of the investment managersguarantees the investment performance, earnings,payment of income distributions or return ofcapital invested in any of the Funds described inthis Booklet.


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HOW WE INVESTThe Mercer Multi-Manager Funds provide investorswith the flexibility to tailor a portfolio to suit theirinvestment objectives and risk profile. Investorscan choose to invest in one or more of the Funds.

About MercerMercer delivers advice and technology-drivensolutions that help organisations meet the health,wealth and career needs of a changing workforce.Mercer’s more than 23,000 employees are based in44 countries and operates in over 130 countries.

Mercer has been providing professional investmentservices to local clients for more than 45 years.Mercer partners with clients across all aspects ofinvesting and our scale allows us to offer acomprehensive suite of investment tools, adviceand solutions to meet client’s specific needs andobjectives.

Mercer’s portfolio management teams manageapproximately US$265 billion worldwide (as at April2019), with approximately A$38 billion invested onbehalf of clients in Australia and New Zealand (as atApril 2019).

In designing and managing the Mercer Multi-Manager Funds, the Responsible Entity draws onMercer’s global network of 1,200 consultingspecialists and its in-house teams of researchprofessionals who cover investment managers,capital markets and strategic opportunities.

Mercer’s investment beliefs

Mercer’s globally consistent investment beliefsguide our investment process but may vary in theirapplicability to our funds and advice to clientsbased on clients’ individual needs and objectives.

Our investment beliefs are:

� Risk management – We believe in the merits ofgenuine diversification and that asset allocationis the most important decision an investor canmake.

� Active management – Active management is askill and our manager research process canimprove the likelihood of identifying skilfulmanagers. We also offer a number of passivelymanaged funds. See the Glossary (page 29) fordefinitions of active management and passivemanagement.

� Dynamic asset allocation – Implementingmedium-term asset allocation changes inresponse to changing market conditions canadd value and/or mitigate risk in a portfolio.

� Operational efficiency – Investment returns canbe enhanced by having a monitoring andgovernance framework that focuses onevaluating and quantifying investmentefficiency.

� Sustainability – Taking a sustainable investmentview is more likely to create and preserve long-term investment capital. Further informationregarding our approach to sustainability andEnvironmental, Social and Governance (ESG)considerations is provided below on pages 6-7.

For more information on our investment beliefsplease visit:multimanager.mercer.com.au/about/investment-beliefs.html.

How the Funds’ assets are investedThe assets of the Funds are invested in a range oftrusts and other investment vehicles, including:

� Other funds managed by the Responsible Entityor related entities.

� Other investment vehicles managed by otherprofessional investment managers.

� Directly in a range of investments such assecurities, derivatives and cash managed viamandates with professional investmentmanagers.

Depending on the nature of the assets they areheld either by the Funds’ custodian or directly bythe Responsible Entity. See Service providers tothe Responsible Entity and Disclosure of interestsand related party transactions on page 20 forfurther information.

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Investment objectives and strategy

The Funds are created with a specific performanceobjective, which we aim to achieve consistentlyover time.

For each Fund, we have determined an investmentstrategy that we believe is reasonably likely toenable the Fund to meet its objectives. However,there is no guarantee that a particular objectivewill be met over a particular period. The investmentstrategy includes the selection of a long-term mixof investments (asset classes) that support theFund’s objectives, as set out in each PDS.

Our multi-manager approach involves selectingoptimal combinations of investment managers toachieve exposure to a range of investmentmanagement styles. In formulating the preferredportfolio structure, we aim to ensure access to abroad opportunity set; use of innovative assetclasses; and exposure to less efficient markets tomaximise the ‘value add’ potential of each fund.Consideration is also given to the mix of active andpassive management, any capitalisation biases andthe optimal number of managers to be utilised. Theoverall objective is to produce consistentperformance throughout market cycles.

Passive funds are invested to ensure the particularsector exposure is consistent with the benchmarkindex for that sector.

Changes may be made to the investmentobjective/s and strategy for each Fund, asrequired, in order to ensure that the objective(s)continue to have a reasonable probability of beingattained. The actual asset allocation may falloutside the stated ranges during certain timessuch as extreme market conditions, asset classtransitions or during material transactions.

We monitor each Fund’s performance againstobjectives, with formal quarterly analysis andreporting to investors. See Reporting in therelevant PDS for details.

Direct investors will be kept informed of anysignificant changes to the features of the Fund(s)in which they are invested. See Material changesor significant events on page 22.

Indirect investors should refer to the offerdocument (e.g. PDS) for their Service for details ofhow your Service Provider will keep them informedin relation to their investment.

Manager research and selectionMercer’s significant scale in researchinginvestment managers globally provides us withaccess to the best ideas from more than 6,300investment managers around the world (as atMarch 2019).

Mercer’s Australian-based multi-manager teamleverages the global Mercer research network toestablish optimal combinations of specialistmanagers for each Fund. Mercer’s investmentmanager research focuses on each manager’sstrength in idea generation, portfolio construction,implementation and business management.

Prior to the appointment of an investment managera detailed Operational Risk Assessment Report isprepared, which considers the risks associatedwith the investment mandate type, firm size, andsignificant third party or outsourced relationships,along with the mitigating or compensating controlsthat a firm may have to manage potential issues.

We may remove, replace, or appoint additionalinvestment managers for the various Funds at ourdiscretion at any time.

Current investment manager details can beobtained at mercer.com.au/mmf or via telephone.

Sustainability and ESG considerations,including labour standardsWe build sustainability principles into ourinvestment portfolios to help protect and enhancethe value of the Funds’ investments. We lookbeyond traditional financial factors to consider thepotential investment impacts of corporategovernance, as well as environmental and socialissues – such as an ageing population, climatechange and human rights.

Mercer believes a sustainable investment approachis more likely to create and preserve long-terminvestment capital and more specifically that:

� Environmental, Social and CorporateGovernance (ESG) factors, including labourstandards, can have a material impact on long-term risk and return outcomes and theseshould be integrated into the investmentprocess.

� Taking a broader perspective on risk, includingidentifying longer-term sustainability themesand trends, is likely to lead to improved riskmanagement and new investment opportunities.

� Climate change poses a systemic risk andinvestors should consider the potential financialimpacts of both the associated transition to alow-carbon economy and the physical impacts.

� Active ownership (or stewardship) helps therealisation of long-term value by providing


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investors with an opportunity to enhance thevalue of companies and markets.

� Accessing long-term streams of returns, ratherthan focusing on short-term price movements,can add value.

This combined approach to the integration of ESGconsiderations and investment stewardship iscaptured at Mercer as a sustainable investmentapproach. Mercer believes that sustainableinvestment principles can be applied across allasset classes, to varying degrees.

The investment managers appointed to the Fundsare:

� Encouraged to consider ESG factors, such asthose set out in the following table, in assessinginvestment risk and opportunities, as relevantto the type of investment, and

� Required to exclude investments in companiesthat manufacture tobacco products andcontroversial weapons, as detailed below underExclusion of tobacco and controversialweapons companies.

ESG factors

ENVIRONMENTAL� Climate change

� Water

� Waste and pollution

� Biodiversity

SOCIAL� Health and safety

� Labour standards (including in the supply chain)

� Human rights and community impacts

� Demographics / consumption

GOVERNANCE

� Board structure, diversity and independence

� Remuneration that is aligned with performance

� Accounting and audit quality

� Anti-bribery and corruption

Active Ownership and Investment Stewardship

We also believe that principles of active ownershipand investment stewardship are of value in theinvestment process. For that reason, proxy votingand engagement around material ESG issues areincorporated throughout our investment decisionmaking and ownership practices, as documented inthe Mercer Funds Sustainable Investment Policy(described below).

In addition, the PDSs for the following Funds setout additional socially responsible considerations,including ethical issues, which are taken intoaccount when making investment decisions forthese Funds only:

� Mercer Australian Socially Responsible SharesFund.

� Mercer Socially Responsible Global Shares Fund– Unhedged Units

� Mercer Socially Responsible Global Shares Fund– Hedged Units.

Mercer Funds Sustainable Investment Policy

The Mercer Funds Sustainable Investment Policy(the Policy) sets out how Mercer will implement itsinvestment beliefs on sustainable investment withinthe Funds. The following key principles underpinthe Policy:

� Clear communication to underlying investmentmanagers and investors regarding Mercer’ssustainable investment expectations.

� Active monitoring of underlying investmentmanagers’ sustainable investment and activeownership activities.

� Engagement with underlying investmentmanagers to improve sustainable investmentpractices over time.

� Proxy voting to enhance the value of companiesand markets.

� Transparency on the implementation of thisPolicy to the investors in the Mercer Funds.

Please refer to the Policy(https://www.multimanager.mercer.com.au/content/dam/mercer/attachments/asia-pacific/australia/investment/multi-manager/2018/mial-sustainable-investment-policy.pdf) for more information on Mercer’sapproach to integrating ESG factors, sustainabilitytrends, climate change, and active ownership(voting and engagement).

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Exclusion of tobacco and controversialweapons manufacturers

As a reflection and extension of our commitment tosustainable investment, in December 2017 theResponsible Entity approved a decision to exclude:

� Controversial weapons: Companies thatmanufacture whole weapons systems,components, or delivery platforms, orcomponents that were developed or aresignificantly modified for exclusive use in clustermunitions, anti-personnel landmines, biologicalor chemical weapons.

� Tobacco companies: Companies identifiedunder the General Industry ClassificationSystem as Tobacco (Industry Code 302030) orwho derive 50% or more of revenue fromtobacco-related business activities.

These exclusions apply to all Mercer Funds.Investment managers in most asset classes havefully implemented the exclusions, with someresidual exposures under review.

Mercer prefers an integration and engagement-based approach to sustainable investment andbelieves exclusions should be a last resort. Mercerhas therefore developed an exclusions frameworkto govern the consideration and maintenance of allexclusions. The reasons to exclude are typically notone dimensional; rather there are likely to be anumber of underlying factors that make continuingto include the product or activity in the investmentuniverse untenable. These factors are likely toreflect a combination of beliefs, social impact,public policy, reputation, client expectations, abilityto influence and portfolio impact.

In the limited instances where exclusions areapplied, Mercer will seek to use its influence withcompanies, regulators, governments and otherstandard setters to address the underlying issue ofconcern.

Changes to the Funds

We may add new Funds, or a Class, close existingFunds or a Class, or alter the terms of any Fund orClass from time to time.

Direct investors will be kept informed of anysignificant changes to the features of the Fund(s)in which they are invested. See Material changesor significant events on page 22 of this Booklet formore information.

Indirect investors should contact their ServiceProvider for any further information.


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KEY RISKSBefore making an investment decision, you should carefully consider your ability to tolerate risk (the probability ofan investment loss), and the different types of risks that apply to the Fund(s) you are considering. This is importantas your investment in the Fund(s) is not guaranteed and as such you may get back less money than you invest.

The significant risks that may impact an investment are set out in the PDS for each Fund. The types of risks that mayhave an impact on the Mercer Multi-Manager Funds generally are summarised below.

RISK DESCRIPTION

Counterpartyrisk

The risk that a counterparty does not meet its contractual obligations, for example,defaulting on financial obligations under a total return swap or a foreign currency forwardcontract. Exposure to a single counterparty is considered to be more of a risk than exposureto multiple counterparties.

Credit risk The risk that a debt issuer will default on payment of interest or principal.

Currency riskThe risk that overseas investments gain or lose value as a result of a falling or risingAustralian dollar. Refer to the relevant PDS for further information on the extent to whichcurrency risks apply and are hedged (fully or partially) or unhedged.

Derivatives risk

The risk that exposure to exchange-traded and over the counter derivative instrumentsincreases the risk in a portfolio or exposes a portfolio to additional risks – such as thepossibility a position is difficult or costly to reverse or that there is an adverse movement inthe asset, interest rate, exchange rate or index underlying the derivative.

Individual assetrisk

The risk attributable to individual assets within a particular asset class. For example, the valueof a company’s shares can be influenced by changes in company management, its businessenvironment or profitability.

Inflation risk The risk that an investment may not maintain its purchasing power due to increases in theprice of goods and services (inflation).

Investmentmanager risk

The risk that a particular investment manager may underperform. This could be, for example,because their view on markets is wrong, because their investment ‘style’ is out of favour orbecause they lose key investment personnel.

Liquidity riskThe risk that the Funds are unable to meet financial obligation to beneficiaries as they falldue, either at all or by selling assets at materially discounted prices. For more informationsee Withdrawal payments on page 27 of this Booklet.

Market risk

The risk of adverse moves in the financial markets negatively impacting the value of aninvestment. Investment returns are influenced by the performance of the markets the Fundhas exposure to. The risk that a major financial market crash will cause a decline in themarket as a whole is an example of market risk. This could have an additional impact at thetime of making and investment or withdrawal, due to the volatility of asset prices.

For the diversified (i.e. multi-sector) funds, market risks are monitored and managed as partof our dynamic asset allocation process. See Section 3 of the relevant PDS for details.

Operational risk

The risk of loss resulting from inadequate or failed internal processes, people and systems,or from external events that we or our service providers may be exposed to in managing oroperating the Funds. This extends to technology failures, service outages, or securitybreaches, including unauthorised access to and/or use of proprietary information, customerdata and disruption to fund operations including potential compromise of an IT asset’sconfidentiality, integrity or availability.

Political riskThe risk that domestic and international political events negatively impact the value of aninvestment. Instability affecting investment returns could stem from a change in government,legislative bodies, other foreign policy makers, or military control.

Securitieslending risk

Our securities lending program involves the lending of the Funds’ securities to third parties(borrowers) in order to provide greater returns for participating Funds. Similar to othertypes of lending arrangements, there is the risk that some of the value of the loanedsecurities is lost. This may be due to the borrower becoming insolvent or unable to meet itsloan obligations. For more information see Our approach to managing risks below on page 9.

Taxation risk The risk that taxation laws and their interpretation may change in the future in a manner thatmay adversely impact the taxation outcomes for either the Funds or investors into the Funds.

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Our approach to managing risksThe Funds have been established based on a multi-manager investment approach, with the exception ofthe passive funds. The passive funds each have asingle investment manager, who has been selectedbased on their ability to efficiently manage a portfoliobased on the composition of the relevant index.

The Responsible Entity has considered theinvestment risks outlined on page 8 in constructingthe Mercer Multi-Manager Funds and aims to helpmanage those risks primarily through diversificationand by using some or all of the following (asapplicable to each Fund or Class):

� Investing across different asset classes to reducemarket risk, inflation risk and liquidity risk.

� Investing with a number of different investmentmanagers to reduce investment manager risk.

� Investing across different countries to reducepolitical risk, inflation risk, liquidity risk andcurrency risk.

� Investing in a number of assets within each assetclass to reduce individual asset risk, liquidity riskand credit risk.

� Where appropriate, utilising currency hedging toprotect against the risk of an adverse currencymovement. Refer to the relevant Fund’s PDS forfurther information on the extent to whichcurrency risks apply and are hedged (fully orpartially) or unhedged.

� Counterparty risk is managed via adherence toour Counterparty Policy and through the settingof criteria for the counterparties we contractwith and the level of exposure per counterparty.

� Securities lending risk is managed by the fullcollateralisation of loans, and the appointment ofan experienced Securities Lending Agent andOversight and Monitoring Agent to administer andmonitor the program.

The investment managers appointed by us to managethe underlying assets in each of the Funds may usederivatives to help manage risk (for example, tohedge all or part of a foreign currency exposure).See the Glossary on page 29 for an explanation ofhedging and the Use of derivatives section below.

Use of derivativesDerivatives, such as futures or options, areinvestment securities whose value is derived fromother investments. For example, the value of a shareoption is linked to the value of the underlying share.

Investment managers may utilise derivatives inmanaging investment portfolios for the Funds and inmanaging pooled investment vehicles in which theResponsible Entity invests. Derivatives may be usedto assist in the efficient management of the portfolio(e.g. to quickly and effectively adjust asset classexposures and for rebalancing purposes) and tomanage risk (e.g. for currency hedging). Losses fromderivatives can occur (e.g. due to marketmovements).

We seek to manage derivatives risk throughadherence to the Derivatives Policy for the MercerFunds.

The estimated fees and costs associated with theuse of Over The Counter (OTC) derivatives aredisclosed in the Fees and costs section of each PDS.

Standard risk measure and risk labelThe standard risk measure is a standardisedinvestment industry guide to assist investors tocompare investment funds that are expected todeliver a similar number of negative annual returnsover any 20 year period.

The standard risk measure is not a completeassessment of all forms of investment risk, forinstance it does not explain what the size of anegative return could be or the potential for apositive return to be less than an investor mayrequire to meet their objectives. Investors shouldstill ensure they are comfortable with the risks andpotential losses associated with their chosenFund(s).

The Standard Risk Measure consists of seven risklabels, from ‘Very high’ to ‘Very low’ as shown in thefollowing table.

Risk label Estimated number of negativereturns over any 20 year period

Very high 6 or more

High Between 4 and 6

Medium tohigh

Between 3 and 4

Medium Between 2 and 3

Low tomedium

Between 1 and 2

Low Between 0.5 and 1

Very low Less than 0.5

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ADDITIONAL EXPLANATION OF FEES AND COSTS

Investment Management FeeThe Investment Management Fee:

� Is the fee charged directly by the ResponsibleEntity for acting as responsible entity, includinginvesting the assets of the Fund; and

� Includes the investment management feespayable to the underlying investment managers.

We may engage one or more investment managers toinvest and manage the assets of a Fund. In doing so,we may negotiate a fee schedule with an investmentmanager under which the fee payable by theResponsible Entity to the investment managerincreases or decreases based on the overall amountof assets managed by the investment manager forthe Funds or other Mercer entities. The InvestmentManagement Fee payable in respect of a Fund will nottypically vary for any such increase or decrease inthe fees payable to any underlying investmentmanager. However, we may elect to adjust the feesand in doing so will notify investors in accordancewith the processes set out under Material changesor significant events on page 22.

Indirect CostsThe Indirect Costs amount for each Fund includesthe liabilities or expenses incurred in administeringthe Fund and investing the assets of the Fund, and allother amounts, other than Transactional andOperational Costs (described below), that reducethe return on your investment.

The Indirect Costs for each Fund:

� Are set out in the PDS for the relevant Fund orClass.

� Are reflected in the unit price of the Fund orClass and/or the unit prices of the underlyinginvestment funds.

� May include some or all of the components setout in the following table.

INDIRECT COSTCOMPONENTS

DESCRIPTION

EstimatedPerformance-Related Fees

Theperformance-related feespayable, if any, tothe Fund’sunderlyinginvestmentmanagers.

The Responsible Entity does not charge a performance fee, however performance-relatedfees may be payable to the Funds’ underlying investment managers. The underlyinginvestment managers that charge a performance-related fee only obtain those fees whenperformance is greater than an agreed target. Accordingly, performance-related fees arisewhen higher returns, relative to a specified target for a particular manager, are achieved.

Where an underlying investment manager charges a performance-related fee, that fee will bepassed onto investors by way of an adjustment to the unit price of the underlying investmentfund, which will reduce the investment performance of the relevant Fund.

As the performance-related fees are based on the underlying investment managers achievingreturn targets, it is not possible to provide an accurate forward-estimate for theperformance-related fee that will be applicable to the relevant Fund. However, set out in theFees and costs section of each PDS is an estimated Indirect Cost that includes the actualperformance-related fee (if any) paid to the underlying investment managers for the previousfinancial year as at the date of the relevant PDS.

We may enter into performance-related fee arrangements with investment managers infuture without prior notice to investors. However, investors will be informed of fee changesin accordance with the law. See Material changes or significant events on page 22.

Estimated OtherIndirect Costs

Expenses of theFund and of anyother underlyingfunds in whichthe Fund mayinvest.

Otherinvestment-specific coststhat reduce thereturn on yourinvestment.

Expenses

The Responsible Entity has the right to be reimbursed from the assets of a Fund for allexpenses and liabilities it incurs in the proper performance of its duties in administering eachFund. See Responsible Entity’s indemnity on page 20 of this Booklet for more information.

Where a Fund invests in another Mercer fund (or funds), or a fund managed by a third partyinvestment manager, the estimated Other Indirect Costs in the relevant PDS include theexpense allowance of the underlying fund(s) where the cost is not already included in theInvestment Management Fee.

Other costs

The estimated Other Indirect Costs for each Fund include any other costs that are nototherwise charged as fees, but which reduce the return on your investment in the Fund. Thismay include the cost of any OTC derivatives that are used for purposes other than hedging,for example, to gain exposure to an asset instead of purchasing the asset directly or costsincurred in the administration and monitoring of the securities lending program.

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The Indirect Costs for each Fund will vary from yearto year reflecting the actual costs incurred, whichmay be affected by changes to one or more of thefollowing:

- Assets under management.

- Expenses of the Responsible Entity.

- Amounts payable to the service providers to theResponsible Entity, including (but not limited to)investment managers, auditors, specialist legaland tax advisors and the custodian.

- Performance of individual investment managers,where performance-related fee arrangementsexist.

As the actual Indirect Cost is not known until the endof the financial year, set out in the Fees and costssection of the PDS is the estimated Indirect Costs,based on the prior financial year actuals for thetimeframe specified in the relevant PDS, orreasonable estimates where the actuals are not yetknown or could not be obtained. Historical fees andcosts may not be an accurate indicator of the feesand costs investors pay in the future.

Estimated ranges of the likely future Indirect Costsare set out in each PDS, although these ranges donot act as limits or caps on the Indirect Costs thatmay be payable in future.

Changes in the Indirect Costs for a financial year maybe disclosed:

- Via the website (mercer.com.au/mmf), where thechange is not materially adverse (includinginstances where there is an increase toperformance-related fees directly attributed tooutperformance).

- Via a notice to you or your Service Providerwhere there is a materially adverse change tothe Indirect Costs for a Fund.

Also see Material changes or significant events onpage 22.

Transactional and operational costsTransactional and operational costs are the costsassociated with trading to manage the Fund’sinvestment strategy, as well as the buy/sell spreadsthat may be applied at the time of an investor makingan application (buy spread) and withdrawal (sellspread).

See the Transactional and operational costs sectionof each PDS for details of the transactional andoperational costs, including buy and sell spreads,applicable to a Fund. Such costs are borne byinvestors and are additional to the ManagementCosts disclosed in the Fees and costs table of therelevant Fund’s PDS.

Ongoing transactional and operational costs include:

- Implicit costs, which includes an assessment ofthe difference between the price paid foracquiring an asset and the price that would bepayable if it were disposed of (i.e. bid/ask priceassessment).

- Explicit costs, such as: brokerage; settlementcosts (including custody costs); clearing costs;stamp duty on an investment transaction;property management costs where applicablefor real estate/property assets; and borrowingcosts.

- Over The Counter (OTC) derivatives costs,where the derivatives are used for hedging (i.e.risk management) purposes. Where the costs ofany OTC derivatives are not used for hedgingpurposes such costs will be included in the OtherIndirect Costs of the relevant Fund.

These costs depend on the type of assets in theFund and the way the portfolio is managed. They areeither paid out of the assets of the relevant Fund ordeducted from the unit price of the underlyinginvestment funds.

Buy and sell spreads

Buy and sell spreads are designed to ensure, as faras practicable, that any transaction costs incurred asa result of an investor applying to or withdrawingfrom the Fund are borne by that investor and not byother existing investors in the relevant Fund.

A buy spread is applied at the time of an investormaking an investment in the Fund and a sell spread isapplied at the time of withdrawal.

Any applicable buy and sell spreads are shown in thePDS for each Fund. The buy and sell spreads may varyfrom time to time and we may waive or reduce thebuy and sell spreads at our discretion. No part of thebuy and sell spreads are paid to the ResponsibleEntity or an investment manager. The buy and sellspreads are not subject to GST.

Other additional fees and costsThe following fees and costs may also be charged,additional to the fees and costs shown in the PDS.

Bank charges

Bank charges in relation to your investment may bepayable by you or your Service Provider. Thesecharges may include telegraphic transfer, bankcheque and dishonour fees.

Advisor fees or consultant fees

As noted in the PDS, additional fees may be paid to afinancial advisor or consultant, if applicable. Pleaserefer to the Statement of Advice from your advisor,in which details of the fees are set out.

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Fees charged on the reinvestment ofincome distributionsWe charge the fees referred to in the Fees and costssection within the PDS on any reinvestment of anincome distribution into the Fund.

Negotiable fees and rebate ofinvestment management feeWe reserve the right to negotiate lower fees withwholesale investors (as defined under section 761Gof the Corporations Act 2001) having regard tofactors such as the amount of their investment. Anydifferential fee arrangements will not adverselyimpact upon the fees that are paid by otherinvestors.

An investment management fee (as set out in therelevant PDS) is charged by deduction from theassets of each Fund when the unit price of the Fundis determined. However, if you or your ServiceProvider (as applicable) have negotiated a lowerinvestment management fee:

- You or your Service Provider will be reimbursedat the end of each month.

- This reimbursement will be made either as adirect payment to your or your ServiceProvider’s nominated bank account or additionalunits will be credited to your investment in therelevant Fund(s).

- The amount of the reimbursement will be thedifference between the investment managementfee deducted from the unit price and theinvestment management fee negotiated by youor your Service Provider.

Fee increasesWe have the right to increase fees to the maximumsset out in the following section titled Maximum feesat any time without the prior approval of investors.You or your Service Provider will be provided with atleast 30 days’ prior written notice of any suchincrease. Reasons for such increases might includechanges in economic conditions or governmentregulations.

Maximum feesUnder the Constitution of each Fund, we have theright to charge maximum fees as follows.

A contribution fee* of:

- 8% of any amount invested in the Mercer PassiveEmerging Markets Shares Fund

- 5% of any amount invested in any of the otherFunds.

An annual investment management fee of:

- 5% per annum of the net asset value of theMercer Passive Emerging Markets Shares Fund**

- 4% per annum of the net asset value for each ofthe units of the Mercer Socially ResponsibleGlobal Shares Fund**

- 2.5% per annum of the net asset value of theother Funds**.

A withdrawal fee* of:

- 5% from each amount paid out of the MercerPassive Emerging Markets Shares Fund

- 3% from each amount paid out of any of theother Funds.

* These fees are not currently charged by any of theFunds.

** The maximum investment management fee underthe Constitution does not include any investmentmanagement fee, performance-related fee orexpenses charged by the underlying investmentmanagers. For further information on these fees, seeAdditional explanation of fees and costs above.

We have elected to forgo these maximums for thefees charged (if any) as shown in the Fees and costssection of the relevant PDS. Any fee increases will bewithin these maximums.

GSTThe GST disclosures in this Booklet are of a generalnature only.

GST will not be payable on units purchased in theMercer Multi-Manager Funds. Fees payable inrespect of the management of the Mercer Multi-Manager Funds are subject to GST (except thebuy/sell spreads), as detailed below.

GST will apply to the management costs charged tothe Mercer Multi-Manager Funds. Generally theFunds cannot claim full input tax credits in respect ofthe GST on these management costs, but will usuallybe entitled to reduced input tax credits in respect ofsome of these costs. As a result, the managementcosts payable to us including GST are higher thanthose disclosed in this Booklet and the PDS for eachFund. The management costs payable to us asdescribed in this Booklet and set out in the PDS foreach Fund approximate the net cost of thesemanagement costs (after GST and net of reducedinput tax credits that are expected to be available).

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TAXATIONThe following information is a general summary onlyin relation to some of the Australian income taxissues that may arise from an investment in theMercer Multi-Manager Funds.

The summary relates primarily to Australianresident investors who hold their units on capitalaccount for Australian income tax purposes onlyand is current as at 20 December 2018. Thissummary assumes that an investor will hold theirunits directly or will be taken to hold those unitsdirectly for tax purposes.

If you are a tax resident of a country other thanAustralia, please also read the Foreign Account TaxCompliance Act (US Citizens) and CommonReporting Standards (Other Offshore Residents)sections on page 23.

If you are an indirect investor, you should refer tothe disclosure document for your Service andconsult your Service Provider for furtherinformation.

Taxation laws are complex and are often changedwith little notice. As individual circumstances differ,the taxation laws will affect individual investors indifferent ways. We recommend that you seek yourown professional advice on taxation matters.

Tax position of the FundsEach Fund will be treated as an Australian residenttrust for tax purposes.

In May 2016, a new elective tax system forAttribution Managed Investment Trust (AMIT)regime was enacted allowing a qualifying managedinvestment trust (MIT) to elect into the AMITregime. The AMIT regime contains a number ofcomponents which may impact the way an investorin a trust is taxed. An election to apply the AMITregime is irrevocable, however the AMIT regimeshould only apply for income years where a trustqualifies as an AMIT.

Broadly, if an eligible MIT elects to be treated as anAMIT, the taxable income and certain exempt /non-assessable income amounts of the trust willflow through to unitholders of the trust based onthe amount and character of income which theResponsible Entity ‘attributes’ to the unitholder.Under the AMIT regime, the attribution of taxableincome and credits is required to be made on a ‘fairand reasonable’ basis in accordance withconstituent documents of the trust.

The Responsible Entity has elected into the AMITregime for each Fund covered by this Booklet.Please refer to the Attribution ManagedInvestment Trust (AMIT) Regime section for further

information on some of the key impacts andconsiderations.

Generally a Fund itself should not be subject toincome tax in respect of its taxable incomeprovided:

� Where it is an AMIT, all taxable income isattributed to investors in each financial year(i.e. ‘attribute’), or

� Where a Fund is not an AMIT, the investors arepresently entitled to all of the ‘income’ of theFund at least on an annual basis (i.e.‘distribute’).

The Responsible Entity intends to attribute, ordistribute if a Fund is not an AMIT, all of the Funds’taxable income to investors on at least an annualbasis and therefore a Fund itself should not besubject to income tax in respect of its taxableincome. There are however, some circumstanceswhere a Fund would be required to withhold taxfrom the attribution/distribution of income, suchas, where no TFN/ABN or exemption has beenprovided and the case of certain income types thathave been attributed/distributed to non-residentinvestors.

If a Fund incurs an overall loss for tax purposes forany given year, that loss will be quarantined in therelevant Fund and cannot be distributed toinvestors. Subject to that Fund satisfying certaintests, the benefit of such a loss may be available tooffset the taxable income of the relevant Fund infuture years.

Where a Fund disposes of covered assets’(broadly,these include equities but not debt typeinvestments), the gains or losses that arecrystallised on such disposals should be assessedfor tax purposes under the capital gains tax (‘CGT’)provisions of income tax legislation. This is on thebasis that the Funds can make an irrevocableelection (‘Capital Election’) to treat the disposal of‘covered assets’ under the CGT provisions and theFunds, other than Mercer Emerging Markets DebtFund and the Mercer Socially Responsible GlobalShares Fund have made an irrevocable election totreat such disposals as being subject to CGTtreatment for tax purposes. The Capital Electionwill continue to apply to future income years wherethe respective Fund satisfies prescribed taxationrequirements for each relevant income year.

The Mercer Emerging Markets Debt Fund and theMercer Socially Responsible Global Shares Fundhave not made the abovementioned CapitalElection for tax purposes as these Funds areunlikely to realise capital gains from theirunderlying investments. Consequently, the gainsand losses on ‘covered assets’ held by the MercerEmerging Markets Debt Fund and the Mercer


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Socially Responsible Global Shares Fund will bedeemed to be on ‘revenue account’.

Where a Fund has net capital gains and the Fundhas taxable income the relevant Fund wouldattribute/distribute some or all of the net capitalgains, including the CGT discount concessionamount.

Where a Fund is in an overall net capital lossposition, the benefit of such a loss cannot beattributed or distributed to investors but may beavailable to offset the capital gains of that Fund infuture years.

In addition, where a Fund makes direct investmentsin foreign entities, additional taxation issues,including those outlined below, will need to beconsidered in determining the tax position of theseFunds.

For certain unlisted investments (in a corporateentity or treated as an investment in a company), itis unlikely a Fund would make any capital gainswhere a gain realised on redemption is treated as adeemed dividend for Australian income taxpurposes. However, a loss incurred on theseinvestments should be treated as capital loss andcan be used to offset capital gains derived by therelevant Fund. The Mercer Emerging Markets DebtFund and the Mercer Socially Responsible GlobalShares Fund however, should not realise anycapital gains or capital losses.

There are rules such as the Controlled ForeignCompany (CFC) rules, the recently enacted ‘hybridmismatch’ rules as well as other proposed rulesrelating to foreign investments that may impact theFunds. Broadly, some of the outcomes under theserules include the requirement to take into account‘notional’ amounts in determining the taxableincome of the Funds. These notional amounts maybe attributed or distributed to investors. TheFunds may also have other taxation obligations(such as in foreign jurisdictions in which the Fundsinvest).

We will monitor the potential application of thecurrent and the proposed rules that may impactthe Funds.

Tax position of investorsAs an investor in one or more of the Funds, youshould be assessed for tax purposes on your shareof the net taxable income of the relevant Fundattributed to you (if the Fund is an AMIT for a givenincome year) or to which you are presently entitled(if the Fund is not an AMIT for a given income year).This is the case regardless of whether you receivea distribution in cash, or your distribution isreinvested in additional units. Taxable incomeattributed/distributed to you should be included inyour assessable income in the year to which theattribution/distribution relates.

Direct investors will receive an annual taxstatement or an AMIT Member Annual Statement(AMMA Statement) to assist in determining their taxobligations.

Indirect investors should refer to the offerdocument (e.g. product disclosure statement) fortheir Service for details of reporting.

Where net capital gains are attributed ordistributed to you by a Fund, it may be possible foryou to offset against such capital gains (aftergrossing up discount gains), any realised capitallosses you may have incurred on the disposal ofyour units in a Fund or on your other investments.

Subject to investors meeting certain requirements,where franking credits or Foreign Income TaxOffsets (e.g. in respect of any foreign taxes paid bya Fund) are attributed or distributed to you by aFund, you may be entitled to use suchcredits/offsets to reduce your Australian taxliability. Certain investors may be entitled to arefund in regards to franking credits attributed ordistributed.

Where a Fund is an AMIT, the AMIT regime allowsfor an increase or decrease to the cost base ofunits held by a unitholder – broadly an increase willarise in circumstances where the amountdistributed to a unitholder is less than the taxableincome (including the CGT discount) and the ‘non-assessable, non exempt’ income attributed to aunitholder and vice versa.

Distributions from a Fund may include ‘tax-deferred amounts’. Tax deferred amounts are,generally, not included in assessable income ofinvestors, but are applied to reduce the ‘cost base’or ‘reduced cost base’ of the units. Consequently,investors may realise a higher capital gain or alower capital loss on the subsequent disposal oftheir investment. Also, where the cost base isreduced to nil, investors should realise animmediate capital gain.

Investor acquisitions and disposal ofunitsWhen you redeem your units from a Fund, you willgenerally be taken to have disposed of your unitsfor CGT purposes. You may be assessed on thegain or loss that arises as a result of such adisposal under the CGT provisions of income taxlegislation.

You should make a capital gain where the proceedsreceived on disposal of your units exceed the costbase of your units.

You should make a capital loss where the proceedsreceived on disposal of your units is less than thereduced cost base of your units.

A capital loss arising on a disposal of units may beavailable for offset against capital gains derived byyou in the same year, or in subsequent years.

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The calculation of your capital gain or loss may beaffected by ‘attributed’ amounts, any tax-freedistributions, tax-deferred distributions or returnof capital amounts received in respect of thoseunits.

Direct investors that are individuals, trusts andcomplying superannuation entities may be entitledto obtain a benefit from the CGT discountconcession in relation to the capital gains realisedon the disposal of units where the units have beenheld for more than 12 months and other prescribedconditions have been satisfied. Corporateinvestors are not eligible for the CGT discount oncapital gains.

Attribution Managed Investment Trust(AMIT) RegimeAn election to apply the AMIT regime is irrevocable,however it will only apply for income years where atrust satisfies the relevant requirements.

Listed below are some of the key changes andimplications of the AMIT regime:

� The new elective AMIT regime is based onattribution, rather than distribution. Inparticular, if an eligible MIT elects to be treatedas an AMIT, the taxable income of the trust willflow through to the unitholders of the trustbased on the amount and character of incomewhich the trustee chooses to ‘attribute’ to theunitholder, rather than based on the share ofthe trust income to which the unitholder ispresently entitled. The attribution of taxableincome and credits is required to be made toinvestors on a ‘fair and reasonable’ basis inaccordance with constituent documents of thetrust.

� AMITs will be deemed to be fixed trusts for thepurposes of the income tax law – this providescertainty in regards to the application of trustloss rules, holding period rule for frankingcredit, certain CGT roll-overs and theapplication of the non-resident CGTexemptions.

� AMITs with multiple classes of units can electfor each unit class to be treated as a separateAMIT for tax purposes.

� AMITs have the ability to reconcile and carryforward under and over distributions (wherethe amount determined at distribution time isdifferent from the final calculation) into theyear in which the under or over is discovered.

� The AMIT regime provides a new system forcost base adjustments to units in qualifyingAMITs, to allow for an increase or decrease tothe cost base of units held by a unitholder –broadly, an increase will arise in circumstanceswhere the amount distributed to a unitholder isless than the taxable income attributed to theunitholder and vice versa.

� Unitholders in an AMIT will be issued with anAMIT Member Annual Statement (AMMAStatement) instead of an annual tax statement.

� The introduction of a penalty regime where anunder or over distribution arises due to a lackof reasonable care.

� Under the AMIT regime, a unitholder has theright to object to the attribution made to themby a trust by notifying the Commissioner ofTaxation.

The Responsible Entity has made an election forAMIT to apply to all of the Funds covered by thisBooklet. The AMIT regime is intended to reducecomplexity, increase certainty and minimisecompliance costs for the Funds and investors.

Ceasing to qualify as an AMIT in anincome year

As outlined above, each Fund needs to qualify as anAMIT on an annual basis, notwithstanding that theAMIT election once made is irrevocable. In theevent a Fund ceases to qualify as an AMIT for anygiven income year, some of the outcomes thatwould arise for that Fund and investors within thatFund are outlined below:

� The relevant Fund should not be subject to taxprovided investors are made presently entitledto all of the income of the Fund; which is theFund’s intention.

� As the investors should be made presentlyentitled to all of the income of the Fund at leaston an annual basis, investors would be subjectto tax on their share of the taxable income(including capital gains) of the Fund.

� The Fund will have the ability to reconcile‘under’ and ‘over’ distributions relating to theperiod when the Fund qualified as an AMITnotwithstanding that it is not an AMIT in theincome year the ‘under’ and ‘over’ was‘discovered’.

� The AMIT regime allows for an increase ordecrease to the cost base of units. However,where the Fund ceases to be an AMIT,unitholders will no longer qualify for a cost baseincrease where the unitholder’s share of thetaxable income exceeds the distribution madeto the unitholder.


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Future taxation changesThe taxation comments above are based on thecurrent taxation laws and practices as at 18 June2019. Taxation laws in general are subject toreform and it is possible that changes to taxationlaws and their interpretation in the future may alterthe tax position of the Funds and investors.

We will monitor taxation developments as theyarise to ensure that the Funds comply with theirtaxation requirements. Investors should alsomonitor tax developments as these may directly orindirectly have an impact on investors.

Collection of Tax File NumbersCollection of tax file numbers is authorised, and itsuse and disclosure are strictly regulated, by tax lawand the Privacy Act. Where you provide your TaxFile Number (TFN) and Australian Business Number(ABN) to us, you acknowledge that we may supplyyour TFN or ABN, as applicable, to other relevantparties.

Any TFN information supplied on your ApplicationForm will automatically be applied to all futureinvestments in the Funds, unless you inform usotherwise.

We are required to provide you with the followinginformation before you supply your TFN to us.

Your TFN is confidential, and you should be awareof the following details before you decide toprovide it:

� If you do provide your TFN to us, it will only beused for legal purposes.

� It is not an offence if you choose not to quoteyour TFN. However, if you don’t provide us withyour TFN or claim an exemption, we may berequired to withhold tax at the top marginal taxrate (currently 45%) plus levies from yourinvestment income. You may be entitled to claima tax credit / offset in your personal income taxreturn for any TFN tax withheld from yourdistributions.

If you are exempt from providing a TFN, you willneed to provide:

� Your full name.

� The code identifying your TFN exemption(where applicable):

− Pensioner - Pension type and exemptioncode (if known).

− Organisation - Not Required to Lodge aTax Return – ‘NIL’ and the reason.

If you are exempt from providing your TFN, you willbe treated as though you have provided us with aTFN. For more information about the use of TFNs,please contact the Australian Taxation Office.

As individual circumstances differ, the taxation laws will affect individual investors in different ways.We recommend that you seek your own professional advice on taxation matters.

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OTHER THINGS YOU SHOULD KNOWAccounts and auditThe financial reports for the Funds are preparedannually by the Responsible Entity in accordancewith the accounting standards applicable at thattime and audited by an independent auditor. Copiesof the financial report, directors’ report andauditor’s report will be sent to investors withinthree months of the end of June in each year(unless an investor requests not to receive them).They are also available via mercer.com.au/mmf.

DistributionsThe distribution period for the Funds is the periodending the last day of June and December eachyear, with the following exceptions:

� The Mercer Income Plus Fund will normallydistribute on the last day of every month.Income distributions will be based on estimateddistributable income each month and actualdistributable income on 30 June each year.

� The following Funds will normally distribute onthe last day of March, June, September andDecember in each year:

─ Mercer Cash Fund – Cash Units

─ Mercer Cash Fund – Term Deposit Units

─ Mercer Australian Shares Fund

─ Mercer Australian Shares Plus Fund

─ Mercer Passive Australian Shares Fund

─ Mercer Australian Shares Fund for TaxExempt Investors.

A special distribution may be paid outside ofschedule if the Responsible Entity determines itnecessary as a result of a significant transaction inor out of a Fund. Furthermore, the final distributionfor each financial year may be adjusted, whereapplicable, to correct for any over or underpayment of the previous distributions relative tothe distributable income for the year. In somecases this may result in non-payment of the finaldistribution for a particular year.

We will determine the distributable income, whichmay be positive or negative, of the Funds (orclasses thereof) for each distribution period.Investors will be presently entitled to thedistributable income referable to the Fund (orClass) in proportion to the number of units held inthe Fund (or Class) at the close of business on thelast day of the period, regardless of whether ornot they were an investor in the Fund (or Class) forthe whole of the distribution period.

Where a Fund is an AMIT, the Fund may accumulateor defer the payment of distributable income towhich a unit holder is made presently entitled,

however, we do not intend to accumulate or deferthe payment of distributable income. See theTaxation section of the PDS for relevant Funds withclasses of units, which details whether the Fundhas made the AMIT multi-class election.

We reserve the right to distribute capital wherethere is insufficient income in a Fund. This may havean impact on an investor’s tax position and thedistribution amounts paid by a Fund going forward.

Direct investors

Direct investors may choose to receive theirdistribution in one of the following ways:

� Reinvested as additional units in the Fund towhich the entitlement relates; or

� Deposited directly to a nominated account at abank, credit union or building society.

Unless you elect to receive your distribution bydirect deposit to a nominated account, yourdistribution will be reinvested in additional units.Reinvested income will be reinvested in the Fundfrom which the income was distributed, generallyusing an ex-distribution reinvestment price.

If you choose not to reinvest your income inadditional units, then the actual income paymentswill be made within two months after the end ofeach accrual period to your nominated bankaccount.

Indirect investors

Indirect investors should refer to the offerdocument (e.g. product disclosure statement) fortheir Service for details of distributions.

Units and unit pricing

What are units?

Direct investors are entitled to a beneficial interestin the Fund in respect of which they hold units.Each unit confers an equal and undivided interest inthe assets of the corresponding Fund as a whole,not in parts or single assets.

Each time a payment is made into a Fund, units areissued by us at the issue price for the Fund orClass. Similarly, when payments are made from aFund or Class, units are redeemed by us at thewithdrawal price.

Please note the Responsible Entity:

� May, in its absolute discretion, accept or rejectall or part of an application for units in any ofthe Funds (including Classes thereof).

� Can only allocate units when it receives all theinformation necessary to process anapplication.


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� May suspend the withdrawal of units in certaincircumstances. See Suspension of units onpage 28 of this Booklet for details.

How and when are unit prices calculated?

The unit price of each Fund or Class is calculatedeach business day by us, although we may calculateprices more or less frequently when appropriate.Unit prices may rise or fall depending onfluctuations in the underlying value of theinvestments in each Fund or Class.

Unit prices are calculated to the fourth decimalplace. A fractional unit has a value equal to theproportion that it bears to a whole unit. The netasset value of a Fund or Class reflects the value ofthe underlying assets of that Fund less anyliabilities (including expenses) related to that Fundor Class.

Where the amount ascertained by the allocation orwithdrawal of units does not exactly equal theamount received or to be paid, then we may issueor redeem a fractional unit equal to the proportionof a whole unit that is outstanding.

The issue price and withdrawal price of a whole unitreflects the net asset value of the a Fund or Class,divided by the number of units on issue at therelevant time for that Fund or Class. In determiningthe unit prices, a notional allowance may be madefor any applicable buy/sell spread and / or anyapplicable disposal costs. See Buy and sell spreadsin the PDS.

Under the Constitution of each Fund, theResponsible Entity (or its nominee) has certaindiscretions in calculating unit prices. We have adocumented policy relating to the exercise ofthese discretions.

Transfers of units

Units may be transferred to another eligibleinvestor. To do so you must lodge an executedtransfer form that has been duly stamped with theResponsible Entity for registration. Registration ofthe transfer is at our discretion and a transfer isnot effective until registered. We do not currentlycharge a transfer fee.

How are assets valued?Unless we determine otherwise, the underlyingassets of the Funds will be valued at their marketvalue. The valuation methods and policies usedresult in the calculation of a unit price that isindependently verifiable.

Asset valuations are to be consistent withAustralian accounting standards and generallyaccepted accounting principles:

� For unitised investments assets valuations areto be based on the latest unit prices available.

� For non-unitised investments the latest

available valuation is to be used to the extent itis consistent with the Responsible Entity’sexpectations and the Custodian’s valuationpolicies.

� For assets valued in another currency, theexchange rate used to convert the value toAustralian dollars is based on the latestexchange rate for the relevant currency.

The valuation methods and policies used result inthe calculation of a unit price that is independentlyverifiable.

The Responsible Entity’s Unit Pricing Policydocuments contingency arrangements forsituations where the fair value of assets cannot bedetermined.

Continuous disclosureIf a Fund becomes a disclosing entity under theCorporations Act 2001, it will be subject to regularreporting and disclosure obligations. Generally, aFund will be a disclosing entity when it has 100members or more. At the date of this Booklet,none of the Funds are a disclosing entity.

If a Fund becomes a disclosing entity, copies of thefollowing documents can be obtained from us freeof charge:

� The most recent annual financial report lodgedwith ASIC.

� Any continuous disclosure notices given by theResponsible Entity after the lodgement of theannual financial report but before the date ofthe PDS.

If a Fund becomes a disclosing entity it will satisfyits continuous disclosure obligations by lodging therequired notices with ASIC. In addition, copies ofdocuments lodged with ASIC (including anycontinuous disclosure notices) in relation to a Fundmay be obtained from, or inspected at, an ASICoffice.

ConstitutionEach Fund was established and operates under itsown respective Constitution, which may beamended from time to time. The Constitution of aFund together with the Corporations Act 2001(Cth) determines our relationship with investors ofthe Fund. You can obtain a copy of any of theConstitutions, free of charge, by calling1300 728 928.

Each Fund’s Constitution contains full details of therights and obligations of investors and theResponsible Entity. The Constitutions are lodgedwith ASIC.

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Amendment of the ConstitutionFrom time to time it may be necessary to amendthe provisions of one or more of the Constitutions.Each Fund’s Constitution can be amended by aspecial resolution of the Fund’s investors or by theResponsible Entity, where it reasonably considersthat the change will not adversely affect investors’rights.

Responsible Entity powers andresponsibilitiesThe Responsible Entity is responsible for:

� Ensuring investors’ rights and interests areprotected.

� The proper investment of assets.

� The general operation of each Fund inaccordance with its Constitution and the law.

The Responsible Entity has power to invest theassets of the Funds in property and any rights ofany kind and has the power to borrow money,although it is not its intention, at the date of thisBooklet, to do so.

Where it is in the interests of investors for theResponsible Entity to conduct an in-specietransfer, the Responsible Entity is permitted torecover the expenses associated with such atransfer from the assets of the relevant Fund or topass those costs on to the transacting investor,unless otherwise agreed.

The Responsible Entity is able to hold units in theFunds as long as it continues to act in the bestinterests of investors. The Responsible Entity hasappointed an independent custodian to provide arange of services including holding the assets ofeach Fund.

The Responsible Entity pays itself a fee out of theinvestment management fee charged to investors.Please refer to the Investment Management Feesection on page 11 for more details.

Responsible Entity’s indemnityThe Responsible Entity is entitled to be indemnifiedout of the assets of each Fund for liabilities orexpenses incurred in administering that Fundunless those liabilities or expenses have arisen outof the Responsible Entity’s failure to properlyperform its duties.

Service providers to the ResponsibleEntityThe Responsible Entity can appoint serviceproviders to assist in running the Funds. The mainservice providers are the custodian as well as thevarious investment managers.

The custodian provides a range of servicesincluding:

� Custody for certain assets where they are notheld directly by the Responsible Entity

� Fund administration services, such as unitpricing and unit registry services

� Services relating to its role as the securitieslending agent for the securities lendingprogram.

The ongoing fees and costs payable to thecustodian in relation to a particular Fund arepayable out of the expense allowance for thatFund, where they do not form part of thetransactional and operational costs. See theAdditional explanation of Fees and Costs, whichstarts on page 11 for further details.

Changing the Responsible EntityThe Responsible Entity may retire or be removedpursuant to an extraordinary resolution passed at ameeting of investors called in accordance with therequirements of the Corporations Act 2001 (Cth).

Conflicts Management FrameworkWhen the Responsible Entity transacts with arelated party, it takes steps to ensure that anyconflicts that may arise as a result are dealt with inaccordance with Mercer (Australia) Pty Ltd’sConflicts Management Framework (‘Framework’).This Framework outlines the systems, structures,processes and controls for the identification,assessment, disclosure, mitigation, monitoring andmanagement of conflicts.

The Framework encompasses:

� A conflicts management policy that establishesour approach for the proper identification,assessment, management, monitoring andreporting. It includes processes for thedevelopment and maintenance of conflictsregisters.

� Conflicts management plans that identify actualand potential conflicts and include actions to betaken to avoid, assess, disclose and managethese conflicts should they arise.

� A related party transaction policy.

� Defined roles and responsibilities in relation tothe management of conflicts.

� Reporting and delegation lines for conflicts ofinterest within the Framework.

� Conflict registers.

Also see Disclosure of interests and related partytransactions below.


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Disclosure of interests and relatedparty transactionsThe interests of the Responsible Entity and otherpersons named in this Booklet and details ofrelated party transactions are as follows:

� The Responsible Entity is paid an investmentmanagement fee for managing the Funds. Thisfee is included in the investment managementfee disclosed in the relevant PDS.

� The Responsible Entity may invest Fund assetsin other funds managed by the ResponsibleEntity or in funds managed by other Mercerentities. The investment fees payable to theResponsible Entity or other Mercer entities, ifany, are included in the investment managementfee disclosed in the relevant PDS. There are noadditional fees payable.

� All investments made by the Responsible Entityin other funds managed by the ResponsibleEntity or in funds managed by other Mercerentities are made on usual commercial termsand on an arm’s length basis or on terms thatare less favourable to the related company.

� The Responsible Entity is entitled to beindemnified and reimbursed out of Fund assetsfor liabilities and expenses incurred in theproper performance of its duties in accordancewith the provisions of each Fund Constitution.These expenses are disclosed in the PDS foreach Fund and further described in the IndirectCosts section on page 11 of this Booklet.

� Mercer (Australia) Pty Ltd provides staff andother resources to the Responsible Entity viainternal resourcing arrangements that are paidfor by the Responsible Entity out of itsinvestment management fee.

� Mercer Outsourcing (Australia) Pty Ltd (MOAPL)provides certain cash management services tothe trustee in relation to cash accounts heldunder investment management agreements tomaximise the interest earned. MOAPL is paid afee out of Fund assets for the provision ofthese services. All services are provided andfees paid are made on usual commercial termsand on an arm’s length basis.

� In addition to acting as Responsible Entity of theFunds, Mercer Investments (Australia) Limitedconducts an investment consulting businessand in this capacity provides certain specialisedservices to the Funds, including:

─ Specialised asset consulting advice

─ Monitoring and oversight services inrelation to custody, fund administrationand the securities lending program

─ Operational risk assessment reports

─ Transition management services.

Mercer Investments (Australia) Limited, whichincludes Mercer Sentinel, is paid a fee out ofFund assets for the provision of these services.All services are provided on usual commercialterms and on an arm’s length basis. Wherethese fees are paid out of Fund assets they areincluded in the Indirect Costs disclosed in theFees and costs section of the relevant PDS.

Compliance plansWe are required to prepare a compliance plan foreach Fund, which describes the procedures theResponsible Entity applies in operating the Fund toensure compliance with the Corporations Act 2001(Cth) and the Fund’s Constitution.

Termination of the FundsEach Fund will continue for 80 years (less one day)from the relevant Fund’s commencement date,unless terminated earlier under the provisions ofthe Constitution or under certain provisions of theCorporations Act 2001 (Cth).

Upon termination, the Responsible Entity must giveeach investor written notice of the termination andrealise the property of the terminated Fund,discharge all liabilities, pay the expenses oftermination and then, subject to meeting therequirements of the Corporations Act 2001 (Cth),distribute the balance to investors in proportion tothe number of units held by them at the date ofdistribution.

Rights of investorsDirect investors

Direct investors are entitled to a beneficial interestin the Fund(s) in respect of which they hold units.Each unit confers an equal and undivided interest inthe assets of the corresponding Fund as a whole,not in parts or single assets. However, investorsare not entitled to interfere with, or exercise, thepowers of the Responsible Entity in respect of anyof the Funds’ property, liability or obligation tolodge a caveat over the Funds’ property.

The rights of direct investors include:

� To have units allocated to, and redeemed from,their unit holding subject to any restrictionscontained in the Constitutions.

� To participate in the distribution of income ofthe Fund(s) in which they are invested.

� To participate in the distribution of assets onthe winding up of the Fund(s) in which they areinvested.

� To receive various information concerning theirinterest in the Fund(s) in which they areinvested and the Fund(s) in general.

� To requisition and vote at meetings ofinvestors.

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Indirect investors

Indirect investors do not have the rights of a directinvestor. For example, you cannot vote at meetingsof investors.

Liability of investorsThe Constitution of each Fund limits the rights ofthe Responsible Entity and any creditors of theFund to seek indemnity from an investor beyondthe extent of the Fund’s property. However,investors should be aware that the effectivenessof such clauses is yet to be finally determined bythe Courts. The Constitution of each Fund givesthe Responsible Entity powers to recoup moneyfrom the Fund’s assets in relation to your taxationliabilities and any other payment expenses.

Meetings of investorsWe may call meetings of investors. At least 21 daysnotice must be given to all investors before ameeting.

Direct investors

You are entitled to attend a meeting in person orby proxy. Resolutions passed at a meeting at whicha quorum of investors is present are binding onyou, whether or not you attend.

Indirect investors

Your Service Provider is entitled to attend ameeting in person or by proxy. Resolutions passedat a meeting at which a quorum of investors ispresent are binding on investors, whether or notthey attend.

Privacy informationDirect investors

We set out below the types of information we holdabout direct investors and how we will deal withthat information.

By investing in the Mercer Multi-Manager Funds(the Funds), you consent to the manner in whichwe collect, disclose, use and hold your personalinformation. If you don’t provide us with yourpersonal information, we may not be able toprocess your investment. Typically this includesyour name, address, date of birth, telephonenumber, email address and tax file number.

This information is collected, used and disclosed toenable you to invest and so that we can properlymanage your investment and provide you withinformation about your investment. If you have anyconcerns about the completeness or accuracy ofthe personal information we have about you orwould like to amend or access your personalinformation, you can contact us by calling1300 728 928.

Personal information is collected from you at thetime you make an investment and may be disclosedto the Funds’ custodian, professional advisors,other companies related to the Responsible Entitythat provide services and or resources to theResponsible Entity, government bodies and otherparties as required by law (e.g. the Australian TaxOffice or the Australian Transaction Reports andAnalysis Centre (AUSTRAC)) and other serviceproviders used by the Responsible Entity to assistus to manage your investment.

Your personal information may also be used formarketing and research purposes including sendingyou information about financial products andservices offered by us or any of our relatedparties. You can notify us at any time (bycontacting us on 1300 728 928) if you do not wishto receive marketing material.

The Mercer (Australia) Pty Ltd Privacy Policy setsout in more detail:

� How we collect, use and disclose your personalinformation.

� Who you need to contact if you wish to reviewyour personal information, if you believe theinformation is incorrect and needs correcting,or if you believe we have not dealt with yourpersonal information in accordance with the lawor Mercer’s Privacy Policy.

� How you can make a complaint and how thatcomplaint will be handled.

In providing and managing your investment yourpersonal information may be stored, disclosed orviewed by service providers in another country.Mercer’s Privacy Policy will include informationregarding any relevant offshore locations, ifapplicable in the future.

Indirect investors

We will not receive or hold any personal informationabout indirect investors investing via a Service.

Material changes or significant eventsDirect investors

All material changes or significant events will beadvised in accordance with the requirements ofthe law.

Direct investors will be provided with at least 30days’ notice of any proposed increases in fees.

If the change or event is not an increase in fees,then notice must be given before the change orevent occurs or as soon as practicable within threemonths after the change or event occurs.However, if the change or event is not adverse toexisting investors' interests and we believe thatinvestors would not be reasonably concernedabout the delay in receiving the information, then


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notice may be provided within 12 months after thechange or event occurs.

Generally, such notices will be provided to directinvestors by email, by an attachment to, or linkwithin, an email or via the Annual Report.

You can obtain up to date information at any timeby visiting mercer.com.au/mmf or calling1300 728 928.

Indirect investors

Indirect investors will be provided with informationabout their investment by their Service Provider.

Monitoring enquiriesWe may, at our discretion, monitor or recordenquiries or transactions made by telephone. Thisis done for reasons of accuracy, security andservice.

Conditions of use for faxinstruction serviceWe offer a fax instruction service which allowsinvestment instructions to be sent via fax.

It is a condition of investing in the Funds thatinvestors release and indemnify the ResponsibleEntity, and any service providers appointed by theResponsible Entity, against all losses, damages andliabilities arising from any payment made or actiontaken based on any fax instruction received whichcontains the correct account name and a signaturewhich appears to be that of the account holder orthat of an authorised signatory of the account,even if it turns out that it was not genuine.

Investors in the Funds must also agree that neitherthey nor anyone claiming through them has anyclaim against the Responsible Entity or its serviceproviders in relation to these payments or actions.

As there is a risk of fraudulent fax withdrawalrequests by someone who has access to investornumber and signature details, investors shouldexercise caution.

The Responsible Entity reserves the right to addadditional requirements to these fax conditions atany time.

Anti-Money Laundering and Counter-Terrorism Financing legislation

Under Anti-Money Laundering and Counter-Terrorism Financing legislation we are required to:

� Collect and verify identification documents toconfirm your identity and the identity ofbeneficial owners (for non-individual investors)at the time of your initial investment.

� Collect investor identification informationbefore processing certain transactions,

including withdrawals.

� Monitor, mitigate and manage the risk of beinginvolved in, or facilitating, money laundering orthe financing of terrorism.

� Establish the source of funds/wealth beinginvested and potentially, collect and verify thesource of funds (payslips, probate, contract ofsale etc).

When we receive a properly completed ApplicationForm we must collect identification documents toverify the identity of investors. This requires eachinvestor to provide the identification documents asset out within the Application Form.

We will not process a transaction if the requiredidentification information is not provided or if weare concerned that a transaction may breach orcause us to breach any requirement under theAnti-Money Laundering and Counter-TerrorismFinancing legislation.

Foreign Account Tax Compliance Act(U.S. Citizens)The Foreign Account Tax Compliance Act (FATCA)is a set of U.S. regulations intended to prevent taxevasion through the use of offshore accounts byU.S. citizens. The Funds are Foreign FinancialInstitutions (FFIs) and are therefore required tocomply with FATCA.

In order for the Responsible Entity to meetcompliance obligations, certain U.S. persons mustfurnish appropriate documentation certifying theirU.S. or non-U.S. tax status, together with suchadditional information as the Responsible Entitymay from time to time request. Failure to providerequested information may subject that U.S.person to a 30% withholding tax on distributions.

Common Reporting Standards (OtherOffshore Residents)The Australian Government has implemented theOECD Common Reporting Standard (‘CRS’) for theautomatic exchange of financial accountinformation, which takes effect from 1 July 2017.

As with the FATCA regime described above, CRSrequires banks and other financial institutions tocollect and report the financial accountinformation of non-resident investors to theAustralian Taxation Office (ATO). The ATO may thenprovide this information to the participating foreigntax authorities of those non-residents.

FATCA and CRS do not affect investors who areclassified as Australian resident investors fortaxation purposes.

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Cooling-offCooling-off refers to a right to cancel yourinvestment in the Fund(s) within certaintimeframes, as set out below.

Direct investors

If you are entitled to cooling-off, then you have 14days during which you can write to us to cancelyour investment in the Funds. This is called the‘cooling-off’ period. The 14 day period starts fromthe earlier of the date you receive our letterconfirming your unit holding or five days after youbecome an investor. You will lose your right tocooling-off if you exercise any other right underthis product within the 14 day period.

If you cancel your unit holding during the cooling-off period, your investment will be refunded. Theamount refunded will be calculated by reference tothe price at which the units would have beenacquired if you had acquired them on the day thecooling-off right is exercised, adjusted for fees andreasonable transaction or administration costs.Therefore, the amount refunded may be greater orless than the amount initially paid.

Cooling-off rights will not apply if a Fund is non-liquid (as defined by the Corporations Act) or whenunits are issued as a result of additionalcontributions, investment income distributions, ormanagement fee rebates.

Indirect investors

You should refer to the offer document (e.g.product disclosure statement) for your Serviceand/or any other offer documents applicable toyour Service for details of any cooling off rightsyou may have in respect of your investment.

Enquiries and complaintsWe have a process in place for dealing with anyenquiries or complaints you may have. If you havean enquiry or complaint you can write to:

Mercer Investments (Australia) LimitedGPO Box 9946Melbourne VIC 3001

Or call us on 1300 728 928.

We will acknowledge a complaint within 14 days andwill communicate our decision to you within 45days.

We seek to resolve any complaints to thesatisfaction of all concerned and in the bestinterests of the investors of each Fund.

If an issue has not been resolved to yoursatisfaction, you can lodge a complaint with theAustralian Financial Complaints Authority (‘AFCA’).AFCA provides fair and independent financialservices complaint resolution that is free toconsumers.

You can contact AFCA via:

Website: www.afca.org.au

Telephone: 1800 931 678 (free call)

Mail: Australian Financial ComplaintsAuthority,GPO Box 3,Melbourne VIC 3001


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HOW TO INVEST AND TRANSACT ON YOUR ACCOUNT

This section contains information for direct andindirect investors on how to invest and transact onyour account. It covers:

� How to make an initial investment (this page).

� Additional investments (page 26).

� In-specie transfers (page 26).

� How to transfer your investment to anotherMercer Multi-Manager Fund (page 27).

� Withdrawal payments (page 27).

How to make an initial investment

Indirect investors

You will need to direct your Service Provider to buyunits in one or more of the Funds on your behalf.To do so, you will need to complete the forms ordocuments your Service Provider requires. Theremay be a delay between the time you provide yourdirection and payment to the Service Provider andwhen it invests in the Fund(s).

We may accept or reject all or part of anapplication for units made on your behalf by yourService Provider.

Direct investors

The minimum initial investment is typically $100,000.However, we may accept investments less than theminimum amount and we may accept or reject all orpart of an application for units made by you.

Step 1 – Application form

To make an initial investment (apply for units) in oneor more of the Mercer Multi-Manager Funds, youwill need to complete the relevant sections of theApplication Form (available atmercer.com.au/mmf).

The Application Form and supporting identificationdocuments should be sent by mail to:

Mercer InvestmentsGPO Box 804Melbourne VIC 3001

Applicants should ensure they provide thenecessary supporting documents with theirapplication. See the Application Form for fulldetails. Under the relevant legislation, your moneycannot be invested until your identity has beenconfirmed. See Anti-Money Laundering andCounter-Terrorism Financing legislation on page23 for more information.

Step 2 – Initial investment monies

You can make your initial investment by a transferof money into the Fund’s bank account viaElectronic Funds Transfer, direct credit or RTGS.Bank account details are provided below.

BANK DETAILS FOR ELECTRONIC PAYMENTS

Bank: HSBC

BSB: 342-011

Account No: 541042001

Reference: Investor number (or full name ifinvestor number not yet issued).

If you plan to electronically transfer monies to theFund’s bank account, please provide us withwritten confirmation of the amount to betransferred on or before the time of the transfertaking place.

Transaction cut off times

Where a properly completed Application Formtogether with any required and correctly endorsedidentification documents are received (togetherwith transferred funds confirmed as cleared fundson that business day) by us:

� Before 3:00pm Melbourne time on a businessday*, the unit price used will generally be thatapplicable at the close of business that day.

� On or after 3:00pm Melbourne time on abusiness day, it will be processed on the nextbusiness day.

* Business day is defined in the Glossary (page 29).

Please see Transactional and operational costs inthe relevant PDS(s) for information on the effect ofthe buy spread on payments into the Fund(s).

Pending applications

Application monies will be held in the Fund’s bankaccount for up to one month pending receipt of aproperly completed Application Form andidentification documents (where required).

Where application monies are pending receipt of aproperly completed Application Form after onemonth of receipt, we will seek to return theapplication monies to the sender along with anybank interest earned.

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Additional investmentsThe Responsible Entity may, in its absolutediscretion, accept or reject all or part of anapplication for units made by you or on your behalfby your Service Provider.

Please see Buy-sell spreads in the Fees and costssection of the PDS for information on the effect ofthe buy spreads on payments into the Funds.

Indirect investors

You will need to direct your Service Provider toapply for additional units in a Fund on your behalf.To do so, you may need to complete the forms ordocuments your Service Provider requires. Youshould be aware that there may be a delaybetween the time you provide your direction andpayment to the Service Provider and when itinvests in a Fund.

Direct investors

You can apply for additional units in a Fund bysubmitting a properly completed AdditionalInvestment Form available at mercer.com.au/mmfor by contacting us on 1300 728 928.

Additional investment applications are subject to aminimum investment amount of $5,000. Howeverwe may accept investments lower than theminimum amount.

Additional investments will be made on the terms ofthe then current PDS. You should obtain and read acopy of the current PDS before making anyadditional investments into the Funds. Copies ofthe current PDS can be obtained viamercer.com.au/mmf or by calling us on1300 728 928.

You may pay the additional investment to us eitherby a transfer of money into the relevant Funds’bank account via Electronic Funds Transfer, directcredit or RTGS. Use your Investor Number as thereference in the payment description. Paymentdetails are provided on page 25.

The additional investment request should be sentvia fax or mail.

Email:[email protected]

Fax: 1300 080 805

Mail: Mercer InvestmentsGPO Box 804Melbourne VIC 3001

By submitting an additional investment request inthe above manner, you agree and acknowledgethat:

� You have received, read and agreed to bebound by the terms of the then current PDS.

� Your personal information will be handled by theResponsible Entity to provide and manage yourinvestment and you consent to your personalinformation being handled in the mannerdisclosed in the PDS.

� You will be bound by the provisions of theConstitutions which govern the operation ofthe relevant Funds you are investing in.


Additional investments are subject to the sametransaction cut-off times as initial investments, asset out on page 25.

Pending additional investments

An additional investment may be held in therelevant Fund’s bank account for up to one monthpending receipt of a properly completed additionalinvestment request. In the event a properlycompleted additional investment request is notreceived after one month any bank interest earnedwill be returned to the sender with their applicationmonies.

Netting-OffWe can apply discretion to meet application orwithdrawal requests received by wholly or partiallynetting-off buyers of units with sellers of units. Anynetting-off of applications or withdrawals will beapplied on a ‘best endeavours’ basis only and we donot guarantee that an investor will be able to applyor withdraw from the Fund ahead of the withdrawaltransaction terms outlined above.

Any netting of units from a seller to buyer will bedone at the unit price available at the time of thetransfer. The issue and withdrawal prices of a unitmay be adjusted by a transaction cost allowance(i.e. buy or sell spreads) where applicable. TheResponsible Entity’s role in any netting of units willbe strictly limited to the operationalimplementation of the netting-off process.


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In specie transfers

Any costs associated with an in-specie transfer,including any stamp duty and governmentcharges, will be borne by the investor requestingthe transfer.

Indirect investors

You should refer to the product disclosurestatement for your Service and/or any other offerdocuments applicable to your Service for details ofwhether in specie transfers are permitted. If inspecie transfers are permitted, then any in specietransfer from another investment vehicle will needto be agreed between your Service Provider andus.

Direct investors

If you wish to arrange an in specie transfer ofassets from another investment vehicle, pleasewrite to us with the details or contact us on1300 728 928.

Investing in another Mercer Multi-Manager FundA request to transfer from one Mercer Multi-Manager Fund to invest in another Mercer Multi-Manager Fund will be processed as a withdrawaland subsequent application. Any transfer ofinvestments between Funds will be made inaccordance with the terms of the then currentPDS for the Fund(s) that you are investing into. Youshould obtain and read a copy of the currentPDS(s) by calling us on 1300 728 928 or visitingmercer.com.au/mmf.

Indirect investors

If your Service Provider offers a switching facility,to switch between Mercer Multi-Manager Fundsavailable via your Service, you will need to contactyour Service Provider and complete any forms ordocuments they require. Your Service Provider willthen lodge a switching request with us. Generally,the Responsible Entity will send a transactionstatement to your Service Provider within onemonth from the date it accepts or rejects theswitching request.

Direct investors

To transfer your investment between MercerMulti-Manager Funds you need to complete theWithdrawal Form and Application Form available viamercer.com.au/mmf or by calling 1300 728 928.

Withdrawal paymentsGenerally, a withdrawal request will be completedwithin ten business days. However, theConstitutions permit us to take up to:

� 21 business days to satisfy a withdrawal requestfor each class of units in the Mercer SociallyResponsible Global Shares Fund

� 40 business days to satisfy a withdrawalrequest for all other funds listed on page 2;

and to extend this period if appropriate.

In the event that any of the Funds become non-liquid (as defined in the Corporations Act 2001(Cth)) investors will only be able to make awithdrawal from that Fund if the Responsible Entitychooses to make a withdrawal offer to investors inaccordance with the requirements of theCorporations Act 2001 (Cth).

The information below on Transaction cut-offtimes and the Suspension of units applies to bothdirect and indirect investors.

Indirect investors

To withdraw all or part of your investment in aFund, you will need to contact your ServiceProvider and complete any forms or documentsthey require. Your Service Provider will then lodgea withdrawal request with us to redeem units fromthe Fund on your behalf.

Direct investors

You may withdraw all or part of your investment inthe Fund(s) by lodging a properly completedWithdrawal Form via:

Email:[email protected]

Fax: 1300 080 805

Mail: Mercer InvestmentsGPO Box 804Melbourne VIC 3001

The Withdrawal Form is available atmercer.com.au/mmf or by contacting us on1300 728 928.

Withdrawals are subject to a minimum withdrawal of$2,500 being made. If requesting a full withdrawalfrom all Funds, we will also treat your withdrawalrequest as a request to close your investmentaccount.

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If your withdrawal request, including all necessaryinformation and appropriate authorised signatures,is received:

� Before 3:00pm Melbourne time on a businessday, the unit price used for the withdrawal willgenerally be that applicable at the close ofbusiness that day. That is, the unit price usedwill not be available at the time the ResponsibleEntity receives and validates your request.

� On or after 3:00pm, it will be processed on thenext business day.

Where there are insufficient funds to meet therequest in the Fund’s bank account, theResponsible Entity will take appropriate action (e.g.redeem investments) to create sufficient funds. Insuch cases the Responsible Entity reserves theright to process the withdrawal using the unit priceapplying at a later date where it would otherwiseprejudice the interests of other investors.

Suspension of units

We may suspend the withdrawal of units in respectto any Fund if in the opinion of the ResponsibleEntity:

� It is, for any reason, impracticable for theResponsible Entity to calculate the withdrawalprice of the units of that Fund due to tradingrestrictions, or because of an event outside thereasonable control of the Responsible Entity, orbecause of the requirements of any law.

� There would be insufficient cash retained in theassets of the Fund after complying with thewithdrawal request to meet other liabilities andin its opinion, it is not in the interest ofinvestors for any assets to be sold in order tosatisfy a withdrawal request.

� It is unable to realise sufficient units of theunderlying assets of the Fund at an appropriateprice or on adequate terms or otherwise due toone or more circumstances outside its control.

� It considers that it is in the interests ofinvestors of that Fund to suspend thewithdrawal of units.

Any unsatisfied withdrawal requests received by usbefore or during any period of suspension will betaken to have been received by us on the businessday after the end of that period of suspension.


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GLOSSARY

Active management

Active management is based on the belief thatsecurities are not efficiently priced, allowing skilledactive managers to identify superior investmentopportunities and outperform the market.

Alternative assets

Alternative assets comprise of investments that donot fit within other asset classes. They may includeinvestments in hedge funds, private equity,mezzanine debt and insurance linked strategies.

Australian shares

Investments in Australian companies listed on theAustralian Stock Exchange (ASX) or equity basedtrusts, derivatives or unlisted Australian basedequity type investments. It may include a smallexposure to companies listed outside the ASX.

Business day

Any day other than a Saturday or Sunday on whichbanks are open for business generally inMelbourne.

Defensive fixed interest and cash

Defensive fixed interest investments generallyprovide a regular income stream with therepayment of capital expected at the end of theterm. These investments are predominantlyinvested in highly rated sovereign bond issuers indeveloped markets or highly rated investmentgrade corporate issuers.

Cash includes short-term interest bearinginvestments and fixed term interest bearinginvestments.

Defensive investments

Defensive investments tend to produce lower butmore stable long-term returns than growthinvestments. Defensive investments include:

� Cash

� Defensive fixed interest

� Growth fixed interest - 50% of any allocation togrowth fixed interest is classified as a defensiveinvestment

� Direct property - 50% of any allocation todirect property is classified as a defensiveinvestment

� Unlisted infrastructure - 30% of any allocationto unlisted infrastructure is classified as adefensive investment

� Hedge funds and diversified growth funds -

50% of the allocation is classified as a defensiveinvestment.

Direct investor

Direct investors hold units directly in a Fund andare entitled to a beneficial interest in the Fund inwhich they hold units.

Diversified funds

Diversified funds invest in more than one assetclass. They may also be referred to as multi-sectorfunds.

Enhanced passive management

Where Mercer selects investment managers toinvest a Fund’s assets using a predominantlypassive approach, with some active managementwithin certain asset classes or sectors. Where anactive approach is taken, typically more than onemanager will be appointed in an asset class. Theinvestment manager panel is configured to achievelower cost access to a diversified portfolioconsistent with the return objective.

Growth/defensive split

For the diversified funds, we have split the assetallocation between ‘growth’ and ‘defensive’ assetclasses. The Growth/defensive split for eachdiversified fund is shown in the relevant PDS.

Growth fixed interest

Growth fixed interest investments target a higherreturn by investing in issuers that may carry ahigher degree of credit risk or illiquidity relative todefensive fixed interest and cash investments.

Generally the exposures will be to non-investmentgrade corporate bond issuers, or sovereign bondissuers in emerging markets, which may also carryemerging market currency risks.

Growth investments

Growth investments have the potential to growover the long-term but are also likely toexperience volatility (ups and downs) inperformance from year to year. Growthinvestments include:

� Australian shares

� International shares

� Listed property

� Listed infrastructure

� Unlisted infrastructure - 70% of any allocationto unlisted infrastructure is classified as agrowth investment

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� Direct (unlisted) property - 50% of anyallocation to direct property is classified as agrowth investment

� Alternative assets, including:

─ Natural resources and private equity

─ Hedge funds and diversified growth funds- 50% of any allocation is classified as agrowth investment

� Growth fixed interest - 50% of any allocation togrowth fixed interest is classified as a growthinvestment.

Hedging

Hedging generally refers to the process ofprotecting investments against, or reducing therisk of, a loss. For example, investment managersmay use various techniques to minimise the effectof currency movements on overseas investments –this is currency hedging.

Indirect investor

An indirect investor has exposure to the Fund via aService such as an Investor Directed PortfolioService (IDPS) or IDPS-like scheme.

International shares

Investments in companies listed on securitiesexchanges around the world. These investmentsmay be hedged or unhedged to manage movementsin exchange rates, which can have an impact on thevalue of investments (up or down).

Investments in international shares may be in:

� Developed markets, which are those countriesthat are among the most sophisticated in termsof economy and capital markets.

� Emerging markets, which includes countriesthat typically have a lower standard of living andless developed infrastructure and financialmarkets.

Minimum investment timeframe

This is the minimum time an investor shouldgenerally consider holding an investment in a Fundin order to achieve investment outcomesconsistent with the Fund’s objectives. This is aguide only.

Multi-manager

Where more than one investment manager isappointed to manage a Fund’s assets.

Passive management

Passively managed funds are those that buy everysecurity in an index, in the same weightings as theyare represented in the relevant index.

Real assets

Real assets include investments in property,infrastructure and natural resources such astimber. These assets may be Australian orinternational and listed or unlisted.

Property investments include, but are not limitedto, office buildings, shopping centres, andindustrial estates.

Infrastructure investments are investments inlong-term assets required for major economic andsocial needs such as airports, tunnels, bridges, tollroads, pipelines and utilities.

Responsible Entity

Responsible Entity means Mercer Investments(Australia) Limited and is referred to as the‘Responsible Entity’, ‘MIAL’, ‘we’, ‘us’ or ‘our’throughout this Booklet unless the contextotherwise requires.

Service

An Investor Directed Portfolio Service (IDPS) orIDPS-like scheme.

Service Provider

A Service Provider is the Investor DirectedPortfolio Service (IDPS) or IDPS-like service entitythat invests on behalf of indirect investors. TheService Provider for an indirect investor holds unitsin the Fund or Class on their behalf.

Standard risk measure

The standard risk measure is a standardisedinvestment industry guide to assist investors tocompare investment funds that are expected todeliver a similar number of negative annual returnsover any 20 year period.

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