Investment Opportunities > Managed Accounts > FAQ

FREQUENTLY ASKED QUESTIONS

Applications
Why can't I obtain a hard copy of the product disclosure statement?
Where do I send my application form?
What long does it take to set up my account?

About
Am I the beneficial owner of my shares?
How are my securities held?

Transacting
How are my initial funds invested?
How do I make additional investments?
Do I retain a minimum cash holding?
How does 2020 DIRECTINVEST BlueChip Series rebalance my portfolio?
How are my regular contributions invested?
Can I make a partial withdrawal from my BlueChip Series account?
How can I close my BlueChip Series Account?
How long will it take when I make a partial/full withdrawal?

Customisation
What are the different ways I can customise my portfolio?
How does security substitution work?
What are holding locks?
What is the difference between a fixed or floating model portfolio weighting?
When are dividends paid?
How are my dividends paid?


Reporting
Will I receive anything in the mail?
What on-line reporting do I receive?
What tax reports do I have access to on-line?

Margin Loan
Can I borrow to invest in the 2020DIRECTINVEST BlueChip Series?


For BlackRock SuperSMA FAQ please click here.
Please Contact Us if you have a question that you would like to ask us.

 

 

Why can't I obtain a hard copy of the product disclosure statement?

In line we our efforts to keep this product low cost, we have created a product that is entirely electronic and online. We hope you appreciate that in order to provide you with the cheapest product possible, only electronic copies of the PDS will be available.

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Where do I send my application form?

2020 DIRECTINVEST
GPO Box 5003
Sydney NSW 2001

 

What long does it take to set up my account?

2020 DIRECTINVEST will have your account opened within 24 hours of receiving your completed application form. Once this account is set up, your original application will be forwarded to Praemium on the same day to be processed for payment. Where you've chosen Direct Debit, funds will be deducted from the nominated bank account on the same day as the application is received by Praemium. Your funds will then be included in the next business day's rebalancing process. Where you've chosen BPay, your funds will be included in the rebalancing process on the next business day after your deposit is received.

Please note that in line with anti-money laundering legislation, Praemium will need to verify your identify before approving your application and may request additional identication which will delay the application process.

 

 What happens if a new Company enters the index in my model portfolio?

The key benefit of the an index strategy is the ability to constantly accumulate a direct share ownership in Australia's leading companies. When the market capitalisation of a company increases, it will be automatically purchased for you.

The shares in the company it has replaced will be sold, with proceeds reinvested into the new company.

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Am I the beneficial owner of my shares?
Under the BlueChip Series structure, you are the beneficial owner of your shares. Importantly, unlike an investment in a managed fund, when you buy shares through BlueChip Series you will also create your own tax cost base.

If you choose to transfer your shares out of BlueChip Series to yourself, you may not create a CGT event.

 

How are my securities held?

Praemium Australia Limited, the Responsible Entity has appointed HSBC Bank Australia Limited as the custodian of the SMA. The assets, liabilities and cash holdings held in an investor’s Personal Portfolio are held separately on trust for them.
 

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How are my initial funds invested?

The investment process begins with an initial contribution which are placed in your 2020 DIRECTINVEST BlueChip Series investment cash account and used to purchase shares in accordance with your selection of  Model Portfolio. The allocation of funds within your chosen Model Portfolio will be in the approximate ratio of their market capitalisation.

 

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How do I make additional investments?

When you open a BlueChip Series account you will be issued with a BPAY Biller and Customer code that is unique to your account. Simply make a BPAY transfer at your bank or via internet banking.

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Do I retain a minimum cash holding?

A cash balance of approximately 2% of your total investment will be retained to cover fees. Interest is paid on any cash that is retained in your 2020 DIRECTINVEST BlueChip Series cash account.

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How does 2020 DIRECTINVEST BlueChip Series rebalance my portfolio?

From time to time, your share portfolio may be rebalanced to reflect the changing values of the companies you own, or to retain your 2% cash position. This will be undertaken automatically through the buying or selling of shares within your portfolio. The purpose of this is to seek a return on your portfolio that is consistent with the investment objective of your chosen Model Portfolio.

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How are my regular contributions invested?

Your monthly contributions will be used to buy those shares that your portfolio is the most underweight in at the time. This process occurs automatically but is subject to meeting the minimum trade size.

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Can I make a partial withdrawal from my account?

Partial withdrawals can be made in cash, stock or a combination of both. To request a partial withdrawal, please complete and return the withdrawal request form available from our Forms page.

You may instruct the withdrawal to be a nominated cash amount where your shares will be sold and the cash deposited into your nominated bank account. You may also wish to make the withdrawal by way of nominating specific shares to transfer in-specie to you.

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How can I close my Account?

If you wish to close your Account, you may instruct Praemium to withdraw all of your investment. Withdrawals can be made by cash, stock or a combination of both. To request an account closure, please complete and return the account closure form available from our Forms page.

If you wish for the withdrawal to be effected partly in cash and partly by way of a transfer of securities, the nominated shares will be in-specie transferred to you, any remaining stocks will be sold down and finally the cash deposited into your nominated bank account following the completed sale.

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How long will it take when I make a partial/full withdrawal? 

Redemptions require a minimum 4 working days to be paid. Redemption requests received during 2020's office hours are processed on the same day of receipt. For cash payment requests, once submitted to Praemium's system, shares will be sold in the next rebalance (usually the next business day) and paid the day after the shares settle (T+3). 

For stock payments, you will be sent an Australian Standard Transfer Form for each security that you wished to transfer for you to sign and return. On receipt, Praemium will forward the paperwork to the share registry you have nominated and await their response before shares are transferred. Where your withdrawal is a combination of stock and cash, your shares are sold on completion of the stock transfer and paid the day after settlement.

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What are the different ways I can customise my portfolio?

The SMA allows you to customise your portfolio in a number of ways:

• Security substitution
• Nominate a minimum trade size (default is 0.25%)
• Minimum holding lock facility

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How does security substitution work?

You may substitute individual securities with another ASX listed security, with cash or reinvest what would have been invested in the excluded security evenly across the other securities and cash in the Model(s).

• Security for Security: The model(s) target allocation to the excluded security will be added to the model's target allocation of the replacement security. Trading of the replacement security will mirror the model manager's buy and sell decisions on the excluded security. 
• Security for Cash: The model(s) target allocation to the excluded security will be added to the target cash position of your personal portfolios.
• Reallocate Security: The excluded security will not be bought, and the model(s) target allocation to it will be pro-rated among the other securities and cash in the model(s).

You should be aware that substitution may result in the performance of your Account deviating from the performance of the Model Portfolio(s). You can nominate a security substitution using the Customisation Form available from the Forms Library.
 

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What are holding locks?

Locking enables a personal portfolio to retain a specified minimum quantity of a security.

• A portfolio will only buy more of the security if the model(s) target allocation is greater than your personal portfolio holding of the security.
• Any additional holding above the minimum quantity will be included in trading.
• The security will not be sold below the minimum quantity.

Applying a holding lock may result in the performance of your account deviating from the preformance of the Model Portfolio(s). You can nominate minimum holding locks using the Customisation Form available from the Forms Library.

 What is the difference between a fixed or floating model portfolio weighting?

Applying the Model Portfolio weights on a floating basis means that if the performance of the model portfolio changes, then the relative values of the Model Portfolios will not be adjusted to its original weighting– they will continue to move independently from each other according to each Model’s relative performance.

If you choose to fix the weightings at every rebalance then the proportion of your Personal Portfolio attributable to each Model Portfolio will remain the same as the Model Portfolio weights that you originally selected.

 

When are dividends paid?

Dividends are paid depending on the schedule of distribution by the individual companies therefore are subject to vary according to their reporting periods. Because you have direct ownership of the shares, unlike a managed fund, you will not receive regular income distributions but rather dividends from individual companies the same as if you purchased the shares independently and individually.

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How are dividends paid?

Your dividends are directed to your interest-bearing deposit account linked to your Personal Portfolio. The funds will then be reinvested across your share portfolio (subject to maintaining the minimum cash balance of 2%).

Alternatively, you can also choose to have your dividends paid into a separate cash account within your personal portfolio which is not included for reinvestment and is paid into your linked nominated bank account on the first of each month.

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Will I receive anything in the mail?

No. The 2020 DIRECTINVEST BlueChip Series was specifically designed to be a cost effective online product, therefore all account information and your Personal Portfolio is viewed online. You will receive nothing in the mail unless you elect to receive a hard copy of the Annual Financial Report. By applying for an Account you agree to obtain reports electronically.

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What online reporting do I receive?

BlueChip Series delivers web based reporting to you day and night. Your share portfolio details are updated daily, so you can log on at any time and check the value of your shares and any trading activity. You can also see your current investment loan balance, dividend payments, cash activity and monitor the performance of your portfolio.

What tax reports do I have access to online?

Buying direct shares in twenty companies on a regular basis would normally generate significant paperwork. But when you invest through BlueChip Series, all this is taken care of for you.

The cost base of your shares is automatically adjusted with each trade and all dividend payments are recorded and paid to your account. Any corporate actions are automatically actioned and recorded. Complete and concise records, available on-line at any time, simplify the preparation of your annual tax return.
 

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Can I borrow to invest?

If you wished to borrow to invest in the 2020 DIRECTINVEST BlueChip20, you can do so through Leveraged Equities or BT Margin Lending. Please contact us for further information on how you may use these facilities or visit the BT Margin Lending page.