Artesian Corporate Bond Fund
- Class A
Product Disclosure Statement
ARSN 616 633 482
APIR ETL8268AU
Issue Date 19 July 2022

About this PDS
This Product Disclosure Statement (“PDS”) has been prepared and issued by Equity
Trustees Limited (“Equity Trustees”, “we” or “Responsible Entity”) and is a summary of
the significant information relating to an investment in the Artesian Corporate Bond Fund
- Class A (the “Fund”). It contains a number of references to important information(including a glossary of terms), contained in the Artesian Corporate Bond Fund - Class A
Reference Guide (“Reference Guide”), each of which forms part of this PDS. You shouldcarefully read and consider both the information in this PDS, and the information in the
Reference Guide, before making a decision about investing in the Fund.
The information provided in this PDS is general information only and does not takeaccount of your personal objectives, financial situation or needs. You should obtainfinancial and taxation advice tailored to your personal circumstances and consider
whether investing in the Fund is appropriate for you in light of those circumstances.
The offer to which this PDS relates is only available to persons receiving this PDS in Australia
and New Zealand (electronically or otherwise). New Zealand investors must read theArtesian Corporate Bond Fund - Class A New Zealand Investors Information Sheet before
investing in the Fund. All references to dollars or “$” in this PDS are to Australian dollars.
New Zealand investors wishing to invest in the Fund should be aware that there may bedifferent tax implications of investing in the Fund and should seek their own tax advice asnecessary.

Contents
1. About Equity Trustees Limited
2. How the ArtesianCorporate Bond Fund - Class A
works
3. Benefits of investing in theArtesian Corporate Bond Fund Class A
4. Risks of managed investment
schemes
5. How we invest your money
6. Fees and costs
7. How managed investment
schemes are taxed
8. How to apply
9. Other information

This PDS does not constitute a direct or indirect offer of securities in the US or to any US
Person as defined in Regulation S under the Securities Act of 1933 as amended (“USSecurities Act”). Equity Trustees may vary this position and offers may be accepted on meritat Equity Trustees’ discretion. The units in the Fund have not been, and will not be,registered under the US Securities Act unless otherwise approved by Equity Trustees andmay not be offered or sold in the US to, or for, the account of any US Person (as defined in
the Reference Guide) except in a transaction that is exempt from the registration
requirements of the US Securities Act and applicable US state securities laws.

The Reference Guide
Throughout the PDS, there are references to additional information contained in the Reference Guide. You can obtain a copy of the PDS andthe Reference Guide, free of charge, by emailing the Investment Manager on bondoperations@artesianinvest.com, visitingwww.artesianinvest.com, calling +61 3 9028 7392 or by calling the Responsible Entity.
The information contained in the Reference Guide may change between the day you receive this PDS and the day you acquire the product. You
must therefore ensure that you have read the Reference Guide current as at the date of your application.

Updated information
Information in this PDS is subject to change. We will notify you of any changes that have a material adverse impact on you or othersignificant events that affect the information contained in this PDS. Any information that is not materially adverse information is subject tochange from time to time and may be obtained by emailing the Investment Manager on bondoperations@artesianinvest.com, visitingwww.artesianinvest.com, calling +61 3 9028 7392. A paper copy of the updated information will be provided free of charge on request.

Investment Manager
Artesian Corporate Bond Pty Ltd
ACN 618 342 895
Authorised representative number 001260177
of Artesian Venture Partners Pty Ltd AFSL
284492
Level 3, 45 Wangaratta Street,
Richmond, VIC 3121
Ph: +61 3 9028 7392
Web: www.artesianinvest.com

Administrator and Custodian
Mainstream Fund Services Pty Ltd
ACN 118 902 891
GPO Box 4968
Sydney NSW 2001
Ph: 1300 133 451
Web: www.mainstreamgroup.com

Responsible Entity
Equity Trustees Limited
ABN 46 004 031 298, AFSL 240975
GPO Box 2307
Melbourne VIC 3001
Ph: +61 3 8623 5000
Web: www.eqt.com.au/insto

Artesian Corporate Bond Fund - Class A PDS

11. About Equity Trustees Limited
The Responsible Entity
Equity Trustees Limited
Equity Trustees Limited ABN 46 004 031 298 AFSL 240975, a
subsidiary of EQT Holdings Limited ABN 22 607 797 615, which is a
public company listed on the Australian Securities Exchange (ASX:
EQT), is the Fund’s responsible entity and issuer of this PDS.
Established as a trustee and executorial service provider by a special
Act of the Victorian Parliament in 1888, today Equity Trustees is a
dynamic financial services institution which continues to grow thebreadth and quality of products and services on offer.
Equity Trustees’ responsibilities and obligations as the Fund’s
responsible entity are governed by the Fund’s constitution(“Constitution”), the Corporations Act and general trust law. Equity
Trustees has appointed Artesian Corporate Bond Pty Ltd as theinvestment manager of the Fund. Equity Trustees has appointed acustodian to hold the assets of the Fund. The custodian has nosupervisory role in relation to the operation of the Fund and is not
responsible for protecting your interests.

The Investment Manager
Artesian Corporate Bond Pty Ltd (“Investment Manager”)
Artesian Capital Management (“Artesian”) is an alternative
investment management company that was part of ANZ Banking
Group’s capital markets business until 2004 when it became astandalone business. Artesian is wholly owned by its directors andemployees. Since 2004, Artesian has managed specialised funds
focused on credit arbitrage and relative-value strategies acrossglobal financial markets. Artesian has offices in Sydney, Melbourne,
Singapore, Shanghai, London and New York and leverages its global
relationships, risk systems, knowledge and research with the aim ofdelivering above market returns for investors.

2. How the Artesian Corporate Bond
Fund - Class A works
The Fund is a registered managed investment scheme governed by
the Constitution. The Fund comprises assets which are acquired inaccordance with the Fund’s investment strategy. Direct investors
receive units in the Fund when they invest. In general, each unit
represents an equal interest in the assets of the Fund subject toliabilities; however, it does not give investors an interest in any
particular asset of the Fund.
If you invest in the Fund through an IDPS (as defined in the Reference
Guide) you will not become an investor in the Fund. The operator or
custodian of the IDPS will be the investor entered in the Fund’s
register and will be the only person who is able to exercise the rights
and receive the benefits of a direct investor. Your investment in theFund through the IDPS will be governed by the terms of your
IDPS. Please direct any queries and requests relating to yourinvestment to your IDPS Operator. Unless otherwise stated, theinformation in the PDS applies to direct investors.

Applying for units
You can acquire units by completing the Application Form that
accompanies this PDS. The minimum initial investment amount for
the Fund is $25,000.
Completed Application Forms should be sent along with youridentification documents (if applicable) to:
Mainstream Fund Services Pty Ltd
Client Services Registry TeamGPO Box 4968
Sydney, NSW, 2001
Please note that cash cannot be accepted.
Additional applications may be faxed to +61 2 9251 3525 or emailed
to registry@mainstreamgroup.com (please insert the fund name inthe subject line of the email).
We reserve the right to accept or reject applications in whole or inpart at our discretion. We have the discretion to delay processing
applications where we believe this to be in the best interest of theFund’s investors.
The price at which units are acquired is determined in accordancewith the Constitution (“Application Price”). The Application Price on
a Business Day is, in general terms, equal to the Net Asset Value(“NAV”) of the Fund, divided by the number of units on issue andadjusted for transaction costs (“Buy Spread”). At the date of this
PDS, the Buy Spread is 0.10%.
2

Artesian Corporate Bond Fund - Class A PDS

The Buy/Sell Spread may change depending on the liquidity of theassets within the Fund’s portfolio at that time andhttps://www.artesianinvest.com/australian-corporate-bond-fund will
be updated as soon as practicable to reflect any change.
The Application Price will vary as the market value of assets in theFund rises or falls.

Making additional investments
You can make additional investments into the Fund at any time bysending us your additional investment amount together with acompleted Application Form. The minimum additional investment is$5,000. Investors who wish to establish a regular savings plan willneed to complete the direct debit section of the Application Form.
The minimum additional investment into the Fund through theregular savings plan each month is $1,000, provided the investor also
holds a minimum investment balance of $25,000. All direct debits are
subject to the Direct Debit Request Service Agreement and thisagreement is in the Reference Guide. It can also be found atwww.eqt.com.au/insto.

Distributions
An investor’s share of any distributable income is calculated inaccordance with the Constitution and is generally based on thenumber of units held by the investor at the end of the distribution
period.
The Fund usually distributes income quarterly at the end of March,June, September and December, however, Equity Trustees maychange the distribution frequency without notice. Distributions arecalculated effective the last day of each distribution period and arenormally paid to investors as soon as practicable after the
distribution calculation date.
Investors in the Fund can indicate a preference to have theirdistribution:• reinvested back into the Fund; or• directly credited to their AUD Australian domiciled bankaccount.
Investors who do not indicate a preference will have theirdistributions automatically reinvested. Applications for reinvestment
will be taken to be received immediately prior to the next BusinessDay after the relevant distribution period. There is no Buy Spread on
distributions that are reinvested.
In some circumstances, the Constitution may allow for an investor’s
withdrawal proceeds to be taken to include a component of
distributable income.
Indirect Investors should review their IDPS Guide for information on
how and when they receive any income distribution.
New Zealand investors can only have their distribution directly
credited if an AUD Australian domiciled bank account is provided,
otherwise it must be reinvested (refer to the Artesian Corporate
Bond Fund - Class A New Zealand Investor Information Sheet).

Access to your money
Investors in the Fund can generally withdraw their investment bycompleting a written request to withdraw from the Fund and mailingit to:
Mainstream Fund Services Pty Ltd
Client Services Registry TeamGPO Box 4968
Sydney, NSW, 2001
Or sending it by fax to: +61 2 9251 3525
Or emailing the request to registry@mainstreamgroup.com (please
insert the fund name in the subject line).
The minimum withdrawal amount is $5,000. Once we receive andaccept your withdrawal request, we may act on your instruction
without further enquiry if the instruction bears your account number
or investor details and your (apparent) signature(s), or yourauthorised signatory’s (apparent) signature(s).
Equity Trustees will generally allow an investor to access theirinvestment within 3-5 days of acceptance of a withdrawal request bytransferring the withdrawal proceeds to such investor’s nominatedbank account. However, Equity Trustees is allowed to reject
withdrawal requests, and also to make payment up to 21 days after
acceptance of a request (which may be extended in certain
circumstances) as outlined in the Constitution and Reference Guide.
We reserve the right to accept or reject withdrawal requests in whole
or in part at our discretion.

The price at which units are withdrawn is determined in accordancewith the Constitution (“Withdrawal Price”). The Withdrawal Price on
a Business Day is, in general terms, equal to the NAV of the Fund,
divided by the number of units on issue and adjusted for transaction
costs (“Sell Spread”). At the date of this PDS, the Sell Spread is
0.10%.
The Buy/Sell Spread may change depending on the liquidity of theassets within the Fund’s portfolio at that time andhttps://www.artesianinvest.com/australian-corporate-bond-fund will
be updated as soon as practicable to reflect any change.
The Withdrawal Price will vary as the market value of assets in theFund rises or falls.
Equity Trustees reserves the right to fully redeem your investment if
your investment balance in the Fund falls below $25,000 as a result ofprocessing your withdrawal request. In certain circumstances, forexample, when there is a freeze on withdrawals, where accepting a
withdrawal is not in the best interests of investors in the Fund
including due to one or more circumstances outside its control orwhere the Fund is not liquid (as defined in the Corporations Act),
Equity Trustees can deny or suspend a withdrawal request and you
may not be able to withdraw your funds in the usual processing times
or at all. When the Fund is not liquid, an investor can only withdraw
when Equity Trustees makes a withdrawal offer to investors inaccordance with the Corporations Act. Equity Trustees is not obliged
to make such offers.
If you are an Indirect Investor, you need to provide your withdrawal
request directly to your IDPS Operator. The time to process awithdrawal request will depend on the particular IDPS Operator andthe terms of the IDPS.

Unit pricing discretions policy
Equity Trustees has developed a formal written policy in relation to
the guidelines and relevant factors taken into account when
exercising any discretion in calculating unit prices (including
determining the value of the assets and liabilities). A copy of thepolicy and, where applicable and to the extent required, any otherrelevant documents in relation to the policy will be made available
free of charge on request.

3. Benefits of investing in the ArtesianCorporate Bond Fund - Class A
The Fund will invest in Australian dollar corporate bonds and cash.
These corporate bonds will be issued by Australian and international
companies. The Fund will invest in liquid securities which allow theInvestment Manager to enter and exit positions easily (in normal
market conditions) resulting in daily liquidity for investors.
Investing in the Fund may offer a number of benefits, including:a) access to investment opportunities and diversification that
individual investors are otherwise unable to achieve;b) a disciplined risk management process that manages different
levels of investment risk relative to anticipated investment returns;c) an experienced, skilled investment management team, with abroad and multi-faceted base of knowledge and experience; andd) participation in any income distributions from the Fund.

Further Reading
You should read the important information in the Reference
Guide about:•

Fund overview;•

Investment approach; and•Why invest in corporate bonds?

under the “Features and benefits” section before making adecision. Go to the Reference Guide which is available atwww.eqt.com.au/insto. The material relating to these matters
may change between the time when you read this PDS and the
day when you acquire the product.

4. Risks of managed investment
schemes

You should read the important information in the Reference
Guide about:

All investments carry risks. Different investment strategies may carrydifferent levels of risk, depending on the assets acquired under the
strategy. Assets with the highest long-term returns may also carry thehighest level of short-term risk. The significant risks below should beconsidered in light of your risk profile when deciding whether toinvest in the Fund. Your risk profile will vary depending on a range offactors, including your age, the investment time frame (how long you
wish to invest for), your other investments or assets and your risk
tolerance.
The Responsible Entity does not guarantee the liquidity of the Fund’sinvestments, repayment of capital or any rate of return or the Fund’sinvestment performance. The value of the Fund’s investments willvary. Returns are not guaranteed and you may lose money byinvesting in the Fund. The level of returns will vary and future returns
may differ from past returns. Laws affecting managed investment
schemes may change in the future. The structure and administrationof the Fund is also subject to change.
In addition, we do not offer advice that takes into account yourpersonal financial situation, including advice about whether the Fundis suitable for your circumstances. If you require personal financial or
taxation advice, you should contact a licensed financial adviser
and/or taxation adviser.
The significant risks of the Fund include (but are not limited to):•Application cut-off times;

Market risk••

Application terms;
Regular Saving Plan;•

Authorised signatories;•

Reports;

Investment returns are influenced by the performance of the market
as a whole. Economic, technological, political and legal factors andmarket sentiment can change. These changes may affect the value ofinvestment markets, the Fund’s investments and the value of theunits.

•

Withdrawal cut-off times;

Investment specific risk•

Withdrawal terms; and•Withdrawal restrictions,

Additional information
If and when the Fund has 100 or more direct investors, it will beclassified by the Corporations Act as a ‘disclosing entity’. As adisclosing entity, the Fund will be subject to regular reporting anddisclosure obligations. Investors would then have a right to obtain acopy, free of charge, of any of the following documents:• the most recent annual financial report lodged with ASIC(“Annual Report”);• any subsequent half yearly financial report lodged with ASIC
after the lodgement of the Annual Report; and• any continuous disclosure notices lodged with ASIC after the
Annual Report but before the date of this PDS.
Equity Trustees will comply with any continuous disclosure obligation
by lodging documents with ASIC as and when required.
Copies of these documents lodged with ASIC in relation to the Fund
may be obtained from ASIC through ASIC’s website.

Further reading

under the “Investing in the Artesian Corporate Bond Fund Class A”, “Managing your investment” and “Withdrawing yourinvestment” sections before making a decision. Go to theReference Guide which is available at www.eqt.com.au/insto.
The material relating to these matters may change between thetime when you read this PDS and the day when you acquire theproduct.

The price of a specific investment of the Fund may be affected bymarket risk (above) but also by factors which are specific to thatinvestment; for example, a circumstance or change impacting aparticular company, sector, region or type of product in which theFund has invested.

Liquidity risk
Under abnormal or difficult market conditions, some normally liquid
assets may become illiquid, restricting the Investment Manager’s
ability to sell them and the Responsible Entity’s ability to makewithdrawal payments to investors without a potentially significant
delay.
Artesian Corporate Bond Fund - Class A PDS

3

Investment manager risk

Target return range

Like other investment managers, the Investment Manager’s
approach directly impacts the value of the Fund’s performance.
There is no guarantee the Fund will achieve its performance
objective or produce results that are positive. Changes in key
personnel within the Investment Manager may also impact theFund’s future return.

RBA cash rate +2.25% to 3.25%. Note the target return and target
return range is not a forecast. It is merely an indication of what theFund aims to achieve over the medium term on the assumption thatcredit markets remain relatively stable throughout the investment
timeframe. The Fund may not be successful in meeting the target
return or target return range. Returns are not guaranteed.

Fund risk
Risks specific to the Fund include the risk that the Fund could
terminate and that the fees and costs payable by the Fund couldchange. There is also a risk that investing in the Fund may givedifferent results than direct investing because of income or capitalgains accrued in the Fund and the consequences of investments andwithdrawals by other investors.

Credit risk
Credit risk is the loss incurred when the borrower or an issuer of asecurity fails to pay their principal or interest obligations when they
are due. This is the primary risk within the portfolio and it is analysedin many different ways by the Investment Manager. Credit limits,which are set through risk management processes, provide aframework for the amount of credit risk that the Fund can take, andthis risk can be supplemented or hedged through the use of tools
such as credit derivative products.

Counterparty risk
There is a risk that a counterparty may breach its obligations. This
could include, but is not limited to, failing to make settlement
payments or returning margin payments.

Interest rate risk
The yield and face value of securities can be affected by interest rate
movement. In instances where interest rates rise, the face value ofcertain fixed rate securities may decline. Equally, in circumstanceswhere interest rates decline, the yield of certain floating ratesecurities will drop to reflect the floating rate nature of the yield.
Also, longer term interest rate expectations have the ability to
impact the value of longer dated fixed rate securities. The
expectation of future rates is embodied in the “yield curve”.

Derivative risk
The Investment Manager may use derivatives, such as interest rate
futures, to hedge interest rate risk arising from the corporate bondsin the portfolio. The Investment Manager may also buy credit default
swaps to hedge the credit risk arising from the corporate bonds inthe portfolio. Risks particular to derivatives include the risk that thevalue of a derivative may not move in line with the underlying asset
and the risk that a particular derivative may be difficult or costly to
trade. Derivatives will only be used for risk management purposes.
Derivatives will not be used within the Fund for speculative or
gearing purposes.

Pandemic and other unforeseen event risk
Health crises, such as pandemic and epidemic diseases, as well asother catastrophes that interrupt the expected course of events,
such as natural disasters, war or civil disturbance, acts of terrorism,
power outages and other unforeseeable and external events, andthe public response to or fear of such diseases or events, have andmay in the future have an adverse effect on the economies andfinancial markets either in specific countries or worldwide andconsequently on the value of the Fund’s investments. Further, undersuch circumstances the operations, including functions such as
trading and valuation, of the Investment Manager and other service
providers could be reduced, delayed, suspended or otherwise
disrupted.

5. How we invest your money
Warning: When choosing to invest in the Fund or an option of
the Fund, you should consider the likely investment returns, therisks of investing and your investment time frame.

Investment objective
Absolute return fund that aims to achieve the RBA cash rate +2.75%
through all interest rate cycles.

Target return
RBA daily cash rate +2.75%.

4Artesian Corporate Bond Fund - Class A PDS

Minimum suggested time frame
The minimum suggested investment time frame for the Fund is two
to four years.

Risk level
The Investment Manager considers this product to be medium risk(for example, riskier than term deposits, but of lower risk andvolatility than that historically seen in equities).

Investor suitability
The Fund is generally suited for persons seeking stable returns.

Investment style and approach
The Investment Manager’s strategy for the Fund is to invest in adiversified portfolio of liquid, fixed and floating rate corporate
bonds. At the date of this PDS, with Australian interest rates at
all-time lows, floating rate note securities (FRNs) offer fixed income
investors opportunities to take advantage of potentially rising rates.
Although the Fund will also invest in fixed rate securities, moreemphasis will be placed on FRNs to mitigate interest rate risk.

Asset allocation
The asset classes in which the Fund invests are: fixed rate corporate
bonds – target exposure 35% (range 0% to 70%); floating rate
corporate bonds – target exposure 55% (range 0% to 100%); cash –target exposure 0-20% (range 0% to 100%). Cash products are cash
held by Australian Authorised Deposit-taking Institutions (“ADIs”),
including certificates of deposit, bank bills and other cash-like
instruments. The Investment Manager also uses derivatives, such as
interest rate futures and credit default swaps, to hedge certain risks
arising from the corporate bonds in the portfolio.
Assets are held directly or indirectly.

Changing the investment strategy
The investment strategy and asset allocation parameters may bechanged. If a change is to be made, investors in the Fund will be
notified in accordance with the Corporations Act.

Labour, environmental, social and ethicalconsiderations
Equity Trustees and the Investment Manager do not generally take
into account labour standards or environmental, social or ethicalconsiderations for the purposes of selecting, retaining or realising
investments.

Fund performance
Up to date information on the performance of the Fund can beobtained from www.artesianinvest.com. A free of charge paper copyof the information will also be available on request.

Market sectors
The Investment Manager aims to deliver the following:(a) a diversified portfolio with potential sector exposures to financial
institutions, technology, media and telecommunications,
utilities,
realestate,manufacturingandconsumergoods/services. The largest sector exposure is likely to befinancial institutions who are the largest issuers in the Australianmarket.
(b) an optimally constructed portfolio selected from diverse market
sectors.
(c) a prudently diversified portfolio with the aim of reducing risk to
idiosyncratic market events.
(d) an actively managed portfolio which will include the rebalancing
of sector bias.

Table 3. Minimum, maximum and target credit rating weights.

Table 1. Minimum, maximum and target sector weights.
Min

Max

TargetExposure to financials

0%

55%

40%

Exposure to each other sector

0%

30%*

10%*

Number of sectors in the portfolio

4

–

6

*Per sector.
These weights are indicative only and the portfolio may fall outsidethese weights from time to time.

Market region and product
The Investment Manager aims to provide the following:(a) a portfolio containing exposure to Australian and international
floating rate and fixed rate bonds and cash. Cash products arecash held by Australian ADIs, including certificates of deposit,
bank bills and other cash-like instruments;(b) a global team to facilitate international credit and market
analysis for the increasing issuance of Australian dollar debt byforeign companies;(c) a carefully selected large floating rate note exposure in order toreduce interest rate risk; and(d) an active trading approach to generate income for investors.
Table 2.1. Minimum, maximum and target region weights.
Min

Max

TargetExposure to foreign bond issuers

0%

50%

30%

Exposure to Australian bond issuers

0%

100%

60%

Exposure to cash

0%

100%

0-20%

Table 2.2. Minimum, maximum and target product weights.

Min

Max

TargetExposure to investment grade debt

72%

100%

90%

Exposure to non-rated debt

0%

10%

0%

Exposure to non-investment grade
debt

0%

10%

0%

Exposure to cash

0%

100%

0-20%

These weights are indicative only and the portfolio may fall outsidethese weights from time to time.

Interest rate risk management
The Fund does have sensitivity to movements in interest rates. The
Investment Manager will observe the following risk metrics whenmanaging the interest rate risk of the portfolio:
Table 4. Minimum, maximum and target interest rate risk duration.

Average duration exposure to rates

Max

TargetExposure to fixed rate bonds

0%

70%

35%

Exposure to floating rate bonds

0%

100%

55%

Exposure to cash

0%

100%

0-20%

Table 2.3. Minimum, maximum and target subordinated debt
exposure.
Min

Max

TargetExposure to subordinated debt

0%

25%

20%

Exposure to ASX listed hybrids*

0%

10%

5%

*Exposure to ASX listed hybrids included in total 25% max
subordinated debt exposure in row above. A hybrid security or“hybrid” typically promises to pay a rate of return until a certain date,in the same way debt securities do but may have equity-like featuresthat may result in a higher rate of return than regular debt securities.
These weights are indicative only and the portfolio may fall outsidethese weights from time to time.

Max

Target

0
years

3.5
years

1
years

These durations are indicative only and the portfolio may fall outsidethese durations from time to time.

Credit risk management
The Fund will have large credit risk exposure which will remainunhedged. The Investment Manager will observe the following risk
metrics when managing the credit risk of the portfolio:
Table 5. Minimum, maximum and target credit risk duration.

Average duration exposure to credit

Min

Min

Min

Max

Target

0
years

6
years

4
years

These durations are indicative only and the portfolio may fall outsidethese durations from time to time.

Concentration risk management
The Fund will aim to avoid concentration risk in the portfolio. The
Investment Manager will observe the following risk metrics whenmanaging the concentration risk of the portfolio:
Table 6. Minimum, maximum and target concentration risk weights.
Min

Max

TargetExposure to any one bond as a % of
total portfolio

0%

20%

3%

Exposure to any one bond as a % of
total bond issue size

0%

10%

0-3%

These weights are indicative only and the portfolio may fall outsidethese weights from time to time.

Credit ratings(a) the Fund will invest at least 90% of funds not invested in cash, ininvestment grade debt rated either BBB- or higher by Standard& Poor’s or Fitch, or Baa3 or higher by Moody’s.
(b) although not a key focus for the Fund, the Fund may invest up to
10% of the portfolio in non-rated Australian dollar issued debt if
deemed appropriate by the Investment Manager.
(c) although not a key focus for the Fund, the Fund may invest up to
10% of the portfolio in non-investment grade Australian dollar
issued debt if deemed appropriate by the Investment Manager.

Artesian Corporate Bond Fund - Class A PDS

56. Fees and costs

Artesian Corporate Bond Fund - Class A

DID YOU KNOW?
Small differences in both investment performance and fees
and costs can have a substantial impact on your long-term
returns.
For example, total annual fees and costs of 2% of yourinvestment balance rather than 1% could reduce your final
return by up to 20% over a 30-year period (for example,
reduce it from $100,000 to $80,000).

Type of fee or cost

AmountHow and when paid

Buy-sell spread
An amountdeducted fromyour investment
representing costs
incurred intransactions by thescheme0.10% upon entry
and 0.10% upon
exit

These costs are an
additional cost to theinvestor but areincorporated into theunit price and arise
when investing
application monies andfunding withdrawals
from the Fund and are
not separately charged
to the investor. The Buy
Spread is paid into theFund as part of an
application and the Sell
Spread is left in theFund as part of aredemption.

Withdrawal fee
The fee on eachamount you takeout of yourinvestment

Not applicableNot applicable

Exit fee
The fee to close
your investment

Not applicableNot applicable

Switching fee
The fee forchanging
investment
options

Not applicableNot applicable

You should consider whether features such as superior
investment performance or the provision of better member
services justify higher fees and costs.
You may be able to negotiate to pay lower fees. Ask the fundor your financial adviser.

TO FIND OUT MORE
If you would like to find out more, or see the impact of the fees
based on your own circumstances, the Australian Securities andInvestments Commission (ASIC) Moneysmart website(www.moneysmart.gov.au) has a managed funds fee calculator
to help you check out different fee options.
The information in the following Fees and Costs Summary can beused to compare costs between different simple managed
investment schemes. Fees and costs can be paid directly from an
investor’s account or deducted from investment returns. For
information on tax please see Section 7 of this PDS.

Fees and Costs Summary
Artesian Corporate Bond Fund - Class A
Type of fee or cost

AmountHow and when paid
1

Ongoing annual fees and costs
Management fees
and costs
The fees and costs
for managing yourinvestment2

0.88% of the NAVof the Fund

The management fees
component ofmanagement fees andcosts are accrued daily
and paid from the Fundmonthly in arrears andreflected in the unit
price. Otherwise, thefees and costs arevariable and deducted
and reflected in theunit price of the Fundas they are incurred.

Performance fees
Amounts
deducted fromyour investment inrelation to theperformance ofthe productNot applicableNot applicable

Transaction costs
The costs incurredby the scheme
when buying or
selling assets

0.00% of the NAVof the FundTransaction costs arevariable and deductedfrom the Fund as they
are incurred andreflected in the unit
price. They aredisclosed net ofamounts recovered by
the buy-sell spread.

Member activity related fees and costs (fees for services or whenyour money moves in or out of the scheme)
Establishment fee
The fee to open
your investment

Not applicableNot applicable

Contribution fee
The fee on eachamountcontributed toyour investment

Not applicableNot applicable

6

Artesian Corporate Bond Fund - Class A PDS

1All fees quoted above are inclusive of Goods and Services Tax(GST) and net of any Reduced Input Tax Credits (RITC). See below for
more details as to how the relevant fees and costs are calculated.
2
The management fee component of management fees and costs
can be negotiated. See “Differential fees” in the “Additional
Explanation of Fees and Costs” below.

Additional Explanation of Fees and Costs
Management fees and costs
The management fees and costs include amounts payable foradministering and operating the Fund, investing the assets of theFund, expenses and reimbursements in relation to the Fund andindirect costs if applicable.
Management fees and costs do not include performance fees ortransaction costs, which are disclosed separately.
The management fees component of management fees and costs of
0.88% p.a. of the NAV of the Fund is payable to the Responsible
Entity of the Fund for managing the assets and overseeing theoperations of the Fund. The management fees component is
accrued daily and paid from the Fund monthly in arrears andreflected in the unit price. As at the date of this PDS, themanagement fees component covers certain ordinary expenses such
as Responsible Entity fees, investment management fees, custodian
fees, and administration and audit fees.
The indirect costs and other expenses component of 0.00% p.a. of
the NAV of the Fund may include other ordinary expenses ofoperating the Fund, as well as management fees and costs (if any)arising from interposed vehicles in or through which the Fundinvests. The indirect costs and other expenses component is variable
and reflected in the unit price of the Fund as the relevant fees andcosts are incurred. They are borne by investors, but they are not paid
to the Responsible Entity or Investment Manager. The indirect costs
and other expenses component is based on the relevant costs
incurred during the financial year ended 30 June 2021.
Actual indirect costs for the current and future years may differ. If in
future there is an increase to indirect costs disclosed in this PDS,
updates will be provided on Equity Trustees’ website atwww.eqt.com.au/insto where they are not otherwise required to bedisclosed to investors under law.

Transaction costs
In managing the assets of the Fund, the Fund may incur transaction
costs such as brokerage, buy-sell spreads in respect of theunderlying investments of the Fund, settlement costs, clearing costs
and applicable stamp duty when assets are bought and sold.
Transaction costs also include costs incurred by interposed vehicles
in which the Fund invests (if any), that would have been transaction
costs if they had been incurred by the Fund itself. Transaction costs
are an additional cost to the investor where they are not recovered by
the Buy/Sell Spread, and are generally incurred when the assets of
the Fund are changed in connection with day-to-day trading or when
there are applications or withdrawals which cause net cash flows intoor out of the Fund.
The Buy/Sell Spread that is disclosed in the Fees and Costs Summaryis a reasonable estimate of transaction costs that the Fund will incur
when buying or selling assets of the Fund. These costs are an
additional cost to the investor but are incorporated into the unit
price and arise when investing application monies and funding
withdrawals from the Fund and are not separately charged to theinvestor. The Buy Spread is paid into the Fund as part of an
application and the Sell Spread is left in the Fund as part of aredemption and not paid to Equity Trustees or the Investment
Manager. The estimated Buy/Sell Spread is 0.10% upon entry and0.10% upon exit. The dollar value of these costs based on an
application or a withdrawal of $25,000 is $25 for each individualtransaction. The Buy/Sell Spread can be altered by the Responsible
Entity
at
any
time
and
www.artesianinvest.com/
australian-corporate-bond-fund will be updated as soon aspracticable to reflect any change. The Responsible Entity may also
waive the Buy/Sell Spread in part or in full at its discretion. The
transaction costs figure in the Fees and Costs Summary is shown net
of any amount recovered by the Buy/Sell Spread charged by the
Responsible Entity.
Transaction costs generally arise through the day-to-day trading of
the Fund’s assets and are reflected in the Fund’s unit price as anadditional cost to the investor, as and when they are incurred.
The gross transaction costs for the Fund are 0.02% p.a. of the NAV of
the Fund, which is based on the relevant costs incurred during thefinancial year ended 30 June 2021.
In relation to the costs that have been estimated, they have been
estimated on the basis of typical fees and costs of similar investments
obtained through research in the market.
However, actual transaction costs for future years may differ.

Can the fees change?
Yes, all fees can change without investor consent, subject to the
maximum fee amounts specified in the Constitution. The current
maximum management fee to which Equity Trustees is entitled is
2.00% of the GAV of the Fund. However, Equity Trustees does notintend to charge that amount and will generally provide investors
with at least 30 days’ notice of any proposed increase to the
management fees component of management fees and costs. In
most circumstances, the Constitution defines the maximum level thatcan be charged for fees described in this PDS. Equity Trustees also
has the right to recover all reasonable expenses incurred in relation
to the proper performance of its duties in managing the Fund and assuch these expenses may increase or decrease accordingly, without
notice.

Payments to IDPS Operators
Subject to the law, annual payments may be made to some IDPS
Operators because they offer the Fund on their investment menus.
Product access is paid by the Investment Manager out of its
investment management fee and is not an additional cost to theinvestor.

Differential fees
The Investment Manager may from time to time negotiate a different
fee arrangement (by way of a rebate or waiver of fees) with certain
investors who are Australian Wholesale Clients or New Zealand
Wholesale Investors. Please contact the Investment Manager on+61 3 9028 7392 for further information.

Example of annual fees and costs for an investment
optionThis table gives an example of how the ongoing annual fees andcosts in the investment option for this product can affect yourinvestment over a 1-year period. You should use this table tocompare this product with other products offered by managed
investment schemes.

EXAMPLE – Artesian Corporate Bond Fund - Class A
BALANCE OF $50,000 WITH A CONTRIBUTION OF $5,000
DURING THE YEAR
Contribution Fees

Nil

Plus
Management fees
0.88% p.a.
and costs

For every additional $5,000
you put in, you will becharged $0
And, for every $50,000 you
have in the ArtesianCorporate Bond Fund Class A you will be charged orhave deducted from yourinvestment $440 each year

Plus
Not applicable And, you will be charged or
Performance fees
have deducted from yourinvestment $0 in performancefees each year
Plus
Transaction costs

0.00% p.a.

EqualsCost of ArtesianCorporate Bond
Fund - Class A

And, you will be charged orhave deducted from yourinvestment $0 in transaction
costs
If you had an investment of$50,000 at the beginning of
the year and you put in an
additional $5,000 during thatyear, you would be charged
fees and costs of:$440*
What it costs you will
depend on the investment
option you choose and thefees you negotiate.

* Additional fees may apply. Please note that this example does not
capture all the fees and costs that may apply to you such as the
Buy/Sell Spread.
This example assumes the $5,000 contribution occurs at the end of
the first year, therefore the fees and costs are calculated using the$50,000 balance only.
Warning: If you have consulted a financial adviser, you may pay
additional fees. You should refer to the Statement of Advice or
Financial Services Guide provided by your financial adviser in which
details of the fees are set out.
ASIC provides a fee calculator on www.moneysmart.gov.au, which
you may use to calculate the effects of fees and costs on accountbalances.
The indirect costs and other expenses component of management
fees and costs and transaction costs may also be based on estimates.
As a result, the total fees and costs that you are charged may differ
from the figures shown in the table.

Further reading
You should read the important information in the Reference
Guide about fees and costs under the “Fees and other costs”
section before making a decision. Go to the Reference Guide
which is available at www.eqt.com.au/insto. The material
relating to these matters may change between the time when
you read this PDS and the day when you acquire the product.

7. How managed investment schemes
are taxed
Warning: Investing in a registered managed investment
scheme (such as the Fund) is likely to have tax consequences.
You are strongly advised to seek your own professional tax
advice about the applicable Australian tax (including income
tax, GST and duty) consequences and, if appropriate, foreign
tax consequences which may apply to you based on yourparticular circumstances before investing in the Fund.

Artesian Corporate Bond Fund - Class A PDS

7The Fund is an Australian resident for tax purposes and does not
generally pay tax on behalf of its investors. Australian resident
investors are assessed for tax on any income and capital gains
generated by the Fund to which they become presently entitled or,where the Fund has made a choice to be an Attribution Managed
Investment Trust (“AMIT”) and the choice is effective for the income
year, are attributed to them.

Further reading
You should read the important information in the Reference
Guide about Taxation under the “Other important information”
section before making a decision. Go to the Reference Guide
which is available at www.eqt.com.au/insto. The material
relating to these matters may change between the time when
you read this PDS and the day when you acquire the product.

8. How to apply
To invest please complete the Application Form accompanying this
PDS, send funds (see details in the Application Form) and yourcompleted Application Form to:
Mainstream Fund Services Pty Ltd
Client Services Registry TeamGPO Box 4968
Sydney, NSW, 2001
Additional applications may be faxed to +61 2 9251 3525 or emailed
to registry@mainstreamgroup.com (please insert the fund name inthe subject line of the email).
Please note that cash cannot be accepted and all applications must
be made in Australian dollars.

Who can invest?
Eligible persons (as detailed in the ‘About this PDS’ section) caninvest, however individual investors must be 18 years of age or over.
Investors investing through an IDPS should use the application form
provided by their IDPS Operator.

Cooling off period
If you are a Retail Client who has invested directly in the Fund, you
may have a right to a ‘cooling off’ period in relation to yourinvestment in the Fund for 14 days from the earlier of:• confirmation of the investment being received; and• the end of the fifth business day after the units are issued.
A Retail Client may exercise this right by notifying Equity Trustees inwriting. A Retail Client is entitled to a refund of their investment
adjusted for any increase or decrease in the relevant Application
Price between the time we process your application and the time we
receive the notification from you, as well as any other tax and otherreasonable administrative expenses and transaction costs associatedwith the acquisition and termination of the investment.
The right of a Retail Client to cool off does not apply in certain
limited situations, such as if the issue is made under a distribution
reinvestment plan, switching facility or represents additional
contributions required under an existing agreement. Also, the rightto cool off does not apply to you if you choose to exercise your rights
or powers as an investor in the Fund during the 14 day period. This
could include selling part of your investment or switching it toanother product.
Indirect Investors should seek advice from their IDPS Operator as towhether cooling off rights apply to an investment in the Fund by the
IDPS. The right to cool off in relation to the Fund is not directly
available to an Indirect Investor. This is because an Indirect Investor
does not acquire the rights of an investor in the Fund. Rather, anIndirect Investor directs the IDPS Operator to arrange for theirmonies to be invested in the Fund on their behalf. The terms andconditions of the IDPS Guide or similar type document will govern an
Indirect Investor’s investment in relation to the Fund and any rights
an Indirect Investor may have in this regard.

8

Artesian Corporate Bond Fund - Class A PDS

Complaints resolution
Equity Trustees has an established complaints handling process andis committed to properly considering and resolving all complaints. If
you have a complaint about your investment, please contact us on:
Phone: 1300 133 472
Post: Equity Trustees Limited
GPO Box 2307, Melbourne VIC 3001
Email: compliance@eqt.com.au
We will acknowledge receipt of the complaint within 1 Business Day
or as soon as possible after receiving the complaint. We will seek toresolve your complaint as soon as practicable but not more than 30
calendar days after receiving the complaint.
If you are not satisfied with our response to your complaint, you may
be able to lodge a complaint with the Australian Financial
Complaints Authority (“AFCA”).
Contact details are:
Online: www.afca.org.au
Phone: 1800 931 678
Email: info@afca.org.au
Post: GPO Box 3, Melbourne VIC 3001.
The external dispute resolution body is established to assist you in
resolving your complaint where you have been unable to do so withus. However, it’s important that you contact us first.

9. Other information
Consent
The Investment Manager has given and, as at the date of this PDS,
has not withdrawn:• its written consent to be named in this PDS as the investment
manager of the Fund; and• its written consent to the inclusion of the statements made about
it which are specifically attributed to it, in the form and context inwhich they appear.
The Investment Manager has not otherwise been involved in the
preparation of this PDS or caused or otherwise authorised the issueof this PDS. None of the Investment Manager nor their employees orofficers accept any responsibility arising in any way for errors oromissions, other than those statements for which they have provided
their written consent to Equity Trustees for inclusion in this PDS.

Further reading
You should read the important information in the Reference
Guide about:•Your privacy;•

The Constitution;••

Anti-Money Laundering and Counter Terrorism Financing(“AML/CTF”);
Indirect Investors;•

Information on underlying investments;•

Foreign Account Tax Compliance Act (“FATCA”);•

Common Reporting Standard (“CRS”); and•Direct Debit Request Service Agreement,

under the “Other important information” and “Direct Debit
Request Service Agreement” sections before making a decision.
Go to the Reference Guide which is available atwww.eqt.com.au/insto. The material relating to these matters
may change between the time when you read this PDS and the
day when you acquire the product.