mercer multi-manager funds · booklet 1 august 2016 staying up to date some of the information...

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 Box9946, 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 a 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

1 A U G U S T 2 0 1 6

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 18 of this Booklet.

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 ........................................................................................................................ 3

KEY RISKS .................................................................................................................................. 6

ADDITIONAL EXPLANATION OF FEES AND COSTS ..................................................................... 8

TAXATION .................................................................................................................................. 11

OTHER THINGS YOU SHOULD KNOW ........................................................................................ 14

HOW TO INVEST AND TRANSACT ON YOUR ACCOUNT ............................................................ 20

GLOSSARY ............................................................................................................................... 23

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 has a Privacy Policy that describes in more detail the manner in which we will deal withinvestors’ personal information. Our Privacy Policy is available to view at mercer.com.au or you can request acopy by calling 1300 728 928. See Privacy information for direct investors on page 18 of this Booklet for moreinformation.

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

* See the Glossary for definitions.

MERCER MULTI-MANAGER FUNDS

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

FUND NAME PDS DATESINGLE SECTOR FUNDSMercer Australian Shares Fund 1 Aug 2016Mercer Australian Shares Plus Fund 1 Aug 2016Mercer Passive Australian Shares Fund 1 Jun 2015Mercer Socially Responsible AustralianShares Fund

1 Jun 2015

Mercer Australian Small Companies Fund 1 Jun 2015Mercer Australian Shares Fund for TaxExempt Investors

1 Jun 2015

Mercer International Shares Fund 1 Jun 2015Mercer International Shares Plus Fund 1 Jun 2015Mercer Passive International SharesFund

1 Jun 2015

Mercer Hedged International SharesFund

1 Jun 2015

Mercer Passive Hedged InternationalShares Fund

1 Jun 2015

Mercer Global Small Companies SharesFund

1 Jun 2015

Mercer Emerging Markets Shares Fund 1 Dec 2015Mercer Passive Emerging MarketsShares Fund

1 Dec 2015

Mercer Global Listed Property Fund 1 Jun 2015Mercer Passive Global Listed PropertyFund

1 Jun 2015

Mercer Global Listed InfrastructureFund

1 Jun 2015

Mercer Passive Global ListedInfrastructure Fund

1 Jun 2015

Mercer Global Natural Resources Fund 1 Jun 2015Mercer Australian Sovereign Bond Fund 1 Dec 2015Mercer Global Sovereign Bond Fund 1 Dec 2015Mercer Australian Inflation Plus Fund 1 Dec 2015Mercer Global Credit Fund 1 Jun 2015Mercer Emerging Markets Debt Fund 1 Jun 2015Mercer Cash Fund – Cash Units 1 Jun 2015Mercer Cash Fund – Term Deposit Units 1 Jun 2015DIVERSIFIED FUNDSMercer Diversified Shares Fund 1 Oct 2015Mercer High Growth Fund 1 Oct 2015Mercer Select Growth Fund 1 Oct 2015Mercer Growth Fund 1 Oct 2015Mercer Moderate Growth Fund 1 Oct 2015Mercer Conservative Growth Fund 1 Oct 2015Mercer Defensive Fund 1 Oct 2015Mercer Income Plus Fund 1 Oct 2015

About this BookletThis 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.

� ‘PDS’ means the Product Disclosure Statementapplicable to the relevant Fund.

For an explanation of the other terms used in thisBooklet refer to the Glossary on page 23.

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 14) and How to invest and transact on youraccount (page 20) 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 EntityThe 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.

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

About the Mercer Multi-Manager FundsThe 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 managersguarantee 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 MercerAfter more than 40 years in the business, Mercernow advises clients who collectively have assets ofmore than US$9.5 trillion worldwide. That makesMercer one of the largest investment advisors inthe world. Mercer’s scale allows it to offer acomprehensive suite of investment tools, adviceand solutions to help its clients navigate complexinvestment markets.

Mercer’s local and international portfoliomanagement teams manage approximately US$135billion worldwide, with approximately A$22 billioninvested on behalf of Australian clients.

In designing and managing the Mercer Multi-Manager Funds, the Responsible Entity draws onMercer’s global network of 1,300 consultingspecialists and its in-house teams of researchprofessionals who cover investment managers,capital markets and strategic opportunities.

Our investment beliefs

We have five investment beliefs that underpin ourapproach and drive investment success:

� 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 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 andESG considerations is provided below on pages4-5.

For more information on our investment beliefsplease visit:mercer.com.au/services/investments/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 investment vehicles managed byprofessional investment managers.

� Other funds managed by the Responsible Entityor related entities.

� 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 16 forfurther information.

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 thewidest 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 and


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passive 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 the PDSfor details.

Direct investors will be kept informed of anysignificant changes to the features of the Fund(s)in which they are invested. See Material changes orsignificant events on page 18.

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 5,800managers around the world (as at 31 Dec 2015).

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 Funds at ourdiscretion at any time.

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

Sustainability and ESG considerationsWe 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, energy andresource constraints and climate change.

We believe environmental, social and governance(ESG) factors may have a material impact on longterm risk and return outcomes.

The investment managers appointed to the MercerMulti-Manager Funds may consider the followingESG factors in assessing investment risk andopportunities, as relevant to the type ofinvestment.

ESG considerations

ENVIRONMENTAL

� Energy efficiency� Pollution control

� Resource scarcity

� Renewable energy

� Water management

� Environmental policies

� Environmental reporting

SOCIAL

� Employee labour standards (including wages,working hours and diversity)

� Occupational health and safety

� Employee relations� Human rights

� Labour practices (including child and forcedlabour)

� Talent attraction and retention

GOVERNANCE

� Community engagement

� Corporate citizenship� Anti-bribery and corruption

� Remuneration

� Board balance and diversity

� Operational and risk management

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Active ownership and investment stewardship

We also believe that principles of active ownershipand investment stewardship are of value in theinvestment process. For that reason, ESGconsiderations, principles of active ownership andinvestment stewardship are incorporatedthroughout our investment decision making andownership practices, as documented in the Mercerfunds:

� Sustainable Investment Policy.

� Corporate Governance Policy.

Each policy is described briefly below.

In addition, the PDS for the Mercer AustralianSocially Responsible Shares Fund sets outadditional socially responsible considerations thatare taken into account when making investmentdecisions for that Fund only.

Mercer Funds Sustainable Investment Policy

Under this policy, we will:

� Inform investment managers and other relevantservice providers about our expectations inrelation to ESG factors and investmentstewardship.

� Regularly monitor the progress of the partiesengaged in investment management to improvealignment between expectations andrequirements in regard to integrating ESG andactive ownership.

� Promote our expectations in respect of ESGand active ownership as a formal part of theinvestment manager selection and reviewprocess.

� Monitor ESG risks and opportunities – such asthe environmental implications of climatechange, the social impacts of health and safetyand the corporate governance implications ofappropriate executive remuneration structures.

� Apply principles of active ownership andinvestment stewardship, including voting andengagement.

Mercer Funds Corporate Governance Policy

Mercer has developed a Corporate GovernancePolicy, which applies to the Mercer Funds in thisBooklet. We actively exercise our duties anddischarge our obligations as an owner and stewardof the assets in which each Fund invests inaccordance with this Policy.

The Mercer Funds Corporate Governance Policyencompasses:

� Share voting – An effective way for Mercer todemonstrate active ownership is by voting itsshares at shareholder meetings and holdingcompanies accountable for their performance,both financially and on ESG issues.

� Corporate engagement – Mercer’s appointedinvestment managers have discussions withsenior management and board members aboutcorporate strategy and operating practices andwe encourage investment managers to operatesustainably and responsibly.

� Public policy participation – Mercer and theFunds’ appointed investment managers engagewith regulators and governments to encouragestrong policies that promote good governanceand sustainability as a foundation forsustainable economic growth.

� Disclosure – In the interests of transparencyfor investors, Mercer will publish on its website(mercer.com.au/mmf) its voting policy and itsvoting record on a six monthly basis, withinthree calendar months of the end of the sixmonth period.

Changes to the FundsWe may add new Funds, close existing Funds oralter the terms of any Fund 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 changes orsignificant events on page 18 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 investment risks that may impact an investment are set out in the PDS for each Fund.

The types of investment risks that may have an impact on an investment in the Mercer Multi-Manager Fundsgenerally are summarised in the following table.

RISK DESCRIPTION

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 Fund’s PDS for further information on the extent towhich currency 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 money may not maintain its purchasing power due to increases in the price ofgoods and services (inflation).

Investmentmanager risk

The risk that a particular investment manager will underperform. This could be, for example,because their view on markets is wrong or because of their investment ‘style’ or becausethey lose key investment personnel.

Market risk

The risk of major movements within a particular financial market or asset class. Investmentreturns are influenced by the performance of the markets the Fund has exposure to. The riskthat a major financial market crash will cause a decline in the market as a whole is an exampleof market risk.

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

Liquidity risk

The risk that investors will be unable to redeem their investment at their chosen time.Liquidity risk also refers to the difficulty in selling an asset for cash quickly without anadverse impact on the price received. Under abnormal or difficult market conditions somenormally liquid assets may become illiquid, restricting the Funds’ ability to sell them and tomake payments to investors without a significant delay. For more information see Withdrawalpayments on page 22 of this Booklet.

Political riskThe risk that domestic and international political events can impact on an investment.Instability affecting investment returns could stem from a change in government, legislativebodies, other foreign policy makers, or military control.

Short-selling risk

The risk of a loss arising from the sale of an asset that the investor does not actually own,with the aim of gains being made if the asset’s price falls and it can be bought later at a lowerprice. Short selling involves a higher level of risk than a typical investment in shares. This isbecause with a typical share investment the maximum loss is generally limited to the amountinvested. However, with short positions the loss increases as the price of the shareincreases.

Taxation riskThe 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 themselves or investorsinto the Funds.

Timing risk

Timing risk relates to the volatility of asset prices, and includes the risk that:� At the date of investment, money is invested at higher market prices than those available

soon thereafter.

� At the date of withdrawal, investments are redeemed at lower market prices than thosethat were recently available or that may have been available soon thereafter.

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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 that are managed on thecomposition of the relevant index.

The Responsible Entity has considered theinvestment risks outlined on page 6 in constructingthe Mercer Multi-Manager Funds and aims to helpmanage those risks primarily through diversificationby using some or all of the following (as applicable toeach Fund):

� 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 individual assets withineach asset class to reduce individual asset risk,liquidity risk and 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.

Timing risk is reduced to an extent by diversification,but is more effectively managed by selecting theFund(s) that best suit your particular investment timehorizon, that is, the time period you expect to holdyour investment in the Fund(s).

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 23 of this Booklet for anexplanation of hedging and the Use of derivativessection 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 the

Responsible 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 the Funds’ exposure toderivatives as part of our Risk ManagementFramework.

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. Further, it does nottake into account the impact of administration feesand tax on the likelihood of a negative return.Investors should still ensure they are comfortablewith the risks and potential losses associated withtheir chosen Fund(s).

The standard risk measure consists of seven risklabels, shown in the following table.

Risk label Estimated number ofnegative returns overany 20 year period

VERY HIGH 6 or more

HIGH Between 4 and 6

MEDIUM TO HIGH Between 3 and 4

MEDIUM Between 2 and 3

LOW TO MEDIUM Between 1 and 2

LOW Between 0.5 and 1

VERY LOW Less than 0.5

Risk labels are indicative only. The risk label for eachFund is shown in the PDS and determined by us onthe basis of financial market forecasts. Risk labelsshould not be considered to be a guarantee orforecast of the number or frequency of negativeannual returns a Fund may experience.


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ADDITIONAL EXPLANATION OF FEES AND COSTS

Investment management feeThe investment management fee in the PDS includesthe investment management fee charged by theResponsible Entity as well as the investmentmanagement fees for all the underlying investmentmanagers.

The Responsible Entity may engage one or moreinvestment managers to invest the assets of a Fund.In doing so, the Responsible Entity may negotiate afee schedule with an investment manager underwhich the fee payable by the Responsible Entity tothe investment manager increases or decreasesbased on the overall amount of assets managed bythe investments manager for the Funds or otherMercer entities. The investment management feepayable in respect of a Fund will not vary for any suchincrease or decrease in the fees payable to anyinvestment manager.

Performance feesThe Responsible Entity does not charge aperformance fee, however performance feearrangements may be established with the Funds’investment managers. Investment managers thatcharge a performance fee only apply those feeswhen performance is greater than an agreed target.Accordingly, performance fees arise when higherreturns, relative to a specified target for a particularmanager, are achieved.

Where an investment manager charges aperformance fee, that fee will be passed ontoinvestors by way of an adjustment to the unit price,which will reduce the investment performance of therelevant Fund.

As the performance fees are based on investmentmanagers achieving return targets, it is not possibleto provide a forward-estimate for the performancefee that will be applicable to relevant Funds.However, set out in the Fees and costs section ofeach PDS is an estimated performance fee that isbased on the actual performance fee paid for eachfund for the stated timeframe, where performancefees are applicable.

Where performance fees are not currently applicableto a Fund this is stated in the PDS. However, we mayenter into such agreements with a Fund’s investmentmanagers in future. Existing investors will beinformed prior to any fee changes, as set out underMaterial changes or significant events on page 18.

Historical fees and costs may not be an accurateindicator of the fees and costs investors pay in thefuture. Actual performance fees paid are disclosed inthe annual financial report.

Expense allowanceThe Responsible Entity has the right to bereimbursed from the assets of the Funds for allexpenses and liabilities it incurs in the properperformance of its duties in administering the Funds.More information about the Responsible Entity’s rightof indemnity is set out under Responsible Entity’sindemnity on page 16 of this Booklet.

The amount deducted from the assets of each Fundfor expenses is called an expense allowance and isincluded in the Fees and costs section in the PDS.The expense allowance for each Fund is passed on toinvestors by way of an adjustment to the unit price,which reduces the investment performance of therelevant Fund.

Where a Fund invests in another Mercer fund or a fundmanaged by another investment manager, the expenseallowance in the PDS includes the expense allowanceof the underlying fund(s) where they are known tous.

The expense allowance will vary from year to yearreflecting the actual expenses incurred. The expenseallowance for a financial year will be reported toinvestors in the annual report and periodicstatements as applicable.

As the expense allowance is not known until the endof the financial year, it is not possible to provide aprecise figure for the expense allowance that will beapplicable to each Fund. For this reason, set out inthe Fees and costs section of the PDS is theestimated expense allowance for the statedtimeframe.

The expense allowance for each Fund covers theliabilities or expenses incurred in administering theFund, which may be affected by changes to one ormore of the following:

� Assets under management.

� Costs of the Responsible Entity.

� Costs of the service providers to the ResponsibleEntity, including (but not limited to) investmentmanagers, specialist legal and tax advisors andthe custodian.

Estimated and/or historical fees and costs may notbe an accurate indicator of the fees and costs aninvestor may pay in the future.

Buy/sell spreads

Any applicable buy sell spreads are shown in the PDSfor each Fund.

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Additional fees and costsThe following fees and costs may be additional to thefees 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.

Other transactional and operational costs

Other transactional and operational costs associatedwith ongoing management and dealing with eachFund’s assets may also be recovered, including stampduty and custodial settlement fees. These costs willdiffer according to the type of assets in the Fund,and will be paid out of the assets of the relevantFund.

Advisor fees

As noted in the PDS, additional fees may be paid to afinancial advisor if a financial advisor is consulted.Please refer to the Statement of Advice from youradvisor, in which details of the fees are set out.

Fees charged on the reinvestmentof income distributionsWe charge the fees referred to in the Fees and costssection within the PDS and apply the buy/sell spread(if any) as set out in the PDS on any reinvestment ofan income distribution into the Funds.

Negotiable feesWe reserve the right to negotiate lower fees with aninvestor having regard to factors such as the amountof their investment. Any differential feearrangements will not adversely impact upon the feesthat are paid by other investors.

Rebate of investment management feeAn investment management fee (as set out in therelevant PDS) is charged by deduction from theassets of each Fund when the unit price isdetermined. However, if you or your Service Provider(as applicable) have negotiated a lower investmentmanagement fee:

� You or your Service Provider will be reimbursed atthe end of each month.

� This reimbursement will be made either as a directpayment to your or your Service Provider’snominated bank account or additional units will becredited to your investment in the relevantFund(s).

� The amount of the reimbursement will be thedifference between the investment managementfee deducted from the unit price and theinvestment management fee negotiated by you oryour 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.

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 MercerPassive Emerging Markets Shares Fund

− 5.00% of any amount invested in any of theother Funds.

� An annual investment management fee of:

− 5% per annum of the net asset value of theMercer Passive Emerging Markets SharesFund**

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

� A withdrawal fee* of:

− 5% from each amount paid out of theMercer Passive Emerging Markets SharesFund

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

* These fees are not currently charged by any of the Funds.

** The maximum investment management fee under theConstitution does not include any investmentmanagement fee, performance fee or expenses chargedby the underlying investment managers. For furtherinformation on these fees, see Additional explanation offees 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 be within these maximums.


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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 relatesto Australian resident investors who hold theirunits on capital account for Australian income taxpurposes only and is current as at 16 November2015. This summary assumes that an investor willhold their units directly or will be taken to holdthose units directly for tax purposes.

This information does not apply to indirectinvestors. If you are an indirect investor, youshould refer to the disclosure document for yourService and consult your Service Provider forfurther information.

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. Investors are expected tobe presently entitled to the income of the Fund atleast on an annual basis and the Responsible Entityintends to distribute all of the Funds’ taxableincome to all presently entitled investors on atleast an annual basis. On this basis, the Fundsthemselves should not generally be subject toincome tax in respect of taxable income generatedby the Funds.

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 Fund in futureyears.

It is expected that, where a Fund disposes ofunderlying investments, the gains or losses thatare crystallised on such disposals (other thancertain investments such as fixed interestsecurities) should be assessed for tax purposesunder the capital gains tax (‘CGT’) provisions ofincome tax legislation. This is on the basis that theFunds can make an irrevocable election (‘CapitalElection’) to treat the disposal of ‘covered assets’under the CGT provisions and have made anirrevocable election to treat such disposals asbeing subject to CGT treatment for tax purposes.The Capital Elections will continue to apply tofuture income years where the respective Fundssatisfy prescribed taxation requirements for eachrelevant income year.

The Mercer Emerging Market Debt Fund has notmade the abovementioned Capital Election for taxpurposes as this Fund is unlikely to realise capitalgains from its underlying investments.Consequently, the gains and losses on “coveredassets” held by the Mercer Emerging Markets DebtFund will be deemed to be on “revenue account”.

Where a Fund has net capital gains, including theCGT Concession Amount, the Funds woulddistribute the net capital gains, including the CGTConcession Amount to presently entitled investors.Where a Fund is in an overall net capital lossposition, the benefit of such a loss may be availableto offset the capital gains of that Fund in futureyears.

In addition, where a fund makes direct investmentsin foreign entities, additional taxation issues willneed to be considered in determining the taxposition of these Funds. The Responsible Entity willmonitor the potential application of the currentControlled Foreign Company taxation rules and theproposed introduction of the Foreign AccumulationFund taxation laws. Broadly, the impact of thesemeasures is to potentially attribute income to aFund for taxation purposes notwithstanding thatthe Fund may not have received any distributionsfrom the foreign entity. Consequently, the Fundmay include ‘notional’ amounts in determining theFund’s taxable income and may also have othertaxation obligations.

Tax position of investorsAs an investor in the Fund(s), you will be assessedfor tax purposes on your share of the net taxableincome of the relevant Fund to which you arepresently entitled. This is the case regardless ofwhether you receive a distribution in cash, or yourdistribution is reinvested in additional units. Taxabledistributions should be included in your taxableincome in the year to which the distribution relates.

Direct investors will receive an annual taxstatement to assist in determining their taxobligations.

Where net capital gains are distributed to you by aFund, it may be possible for you to offset againstsuch capital gains (after grossing up discountgains), any realised capital losses you may haveincurred on the disposal of your units in a Fund oron your other investments.

Subject to investors meeting certain requirements,where franking credits or Foreign Income TaxOffsets are distributed to you by the Fund(s), youmay be entitled to use such credits/offsets toreduce your Australian tax liability. Certaininvestors may be entitled to a refund in regards tofranking credits distributed.


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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 withdraw your units from a Fund, you willgenerally be taken to have disposed of your unitsfor CGT purposes. You may be assessed on anygain or loss that arises as a result of such adisposal under the CGT provisions of income taxlegislation.

You will be taken to have made a capital gain wherethe proceeds received on disposal of your unitsexceed the cost base of your units, as determinedunder the CGT provisions.

You will be taken to have made a capital loss wherethe proceeds received on disposal of your units isless than the reduced cost base of your units, asdetermined under the CGT provisions.

Any 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.

The calculation of your capital gain or loss may beaffected by any tax-free or tax-deferreddistribution received in respect of those units.

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.

Proposed tax reform measuresThe taxation comments above are based on thecurrent taxation laws and practices. Taxation lawsin general are subject to reform and it is possiblethat changes to taxation laws and theirinterpretation in the future may alter the taxposition of the Funds and investors.

On 4 May 2016, the Tax Laws Amendment (New Taxsystem for Managed Investment Trusts) Bill 2015was passed by parliament. The implications of thislegislation for the Mercer Multi-Manager Funds arebeing considered and no decision has been madeas to if or when the Funds will elect in to the newregime.

The Responsible Entity will monitor taxationdevelopments as they arise to ensure that theFunds comply with their taxation requirements.Investors should also monitor tax developments asthese may directly or indirectly have an impact oninvestors.

Foreign Account Tax Compliance ActThe 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.

As individual circumstances differ, the taxation lawswill affect individual investors in different ways. TheResponsible Entity recommends that you seek yourown professional advice on taxation matters.

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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 more tax from yourinvestment income than may otherwise berequired. You may be entitled to claim a taxcredit / 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.


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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 on the financial report will be sentto investors within three months of the end of Junein each year (unless an investor requests not toreceive them). They are also available viamercer.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 estimatednet income each month and actual net incomeon 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.

We will determine the net income (which may bepositive or negative) of the Funds for eachdistribution period. Investors will be presentlyentitled to the net income referable to the Fund inproportion to the number of units held in the Fundat the close of business on the last day of theperiod, regardless of whether or not they were aninvestor in the Fund for the whole of thedistribution period.

We reserve the right to distribute capital wherethere is not sufficient income in a Fund. In suchinstances, the distribution received is capital innature, not income. This may have an impact on aninvestor’s tax position and the distribution amountspaid 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. Similarly, whenpayments are made from a Fund, units areredeemed by us at the withdrawal 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.

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

� May suspend the withdrawal of units in certaincircumstances. See Suspension of units on page22 of this Booklet for details.

How and when are unit prices calculated?

The unit price of each Fund is calculated eachbusiness day by us, although we may calculateprices more or less frequently when appropriate.Unit prices may rise or fall depending on

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fluctuations in the underlying value of theinvestments in each Fund.

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 reflects the value of theunderlying assets of that Fund less any liabilities(including expenses) related to that Fund.

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 a Fund divided bythe number of units on issue at the relevant timefor that Fund. In determining the unit prices, anotional allowance may be made for any applicablebuy/sell spread and / or any applicable disposalcosts. See Buy/sell spreads in 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 latestavailable 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.

Each Fund’s Constitution contains full details of therights and obligations of investors and theResponsible Entity. The Constitutions are lodgedwith ASIC. You can obtain a copy of any of theConstitutions, free of charge, upon request.

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.


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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 current intention 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 Fund.

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 8 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 arenot held directly by the Responsible Entity, as wellas fund administration services (such as unit pricingand unit registry services).The ongoing fees andcosts payable to the custodian in relation to aparticular Fund are payable out of the expenseallowance for that Fund, where they do not formpart of the transactional and operational costs(see Other transactional and operational costs onpage 9).

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’s Conflicts ManagementFramework (‘Framework’). This Framework outlinesthe systems, structures, processes and controlsfor the identification, assessment, disclosure,mitigation, monitoring and management ofconflicts.

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.

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 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 PDS, there are no additionalfees payable.

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� 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 Expenseallowance section on page 8 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 specialisedconsulting services to the Funds, includingspecialised asset consulting, custodialmonitoring and reporting and transitionmanagement services. Mercer Investments(Australia) Limited is paid a fee out of Fundassets for the provision of these services. Allservices are provided on usual commercialterms and on an arm’s length basis. Wherethese fees are paid out of Fund assets they areincluded in the expense allowance disclosed inthe Fees and costs section of the 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 of

termination 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 investors

Direct 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.

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.


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Meetings of investorsWe may call meetings of investors. At least 21 days’notice 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 information for directinvestorsWe set out below the types of information we holdabout direct investors and how we will deal withthat information. We will not receive or hold anypersonal information about indirect investors.

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 calling 1300 728928.

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 (by

contacting us on 1300 728 928) if you do not wishto receive marketing material.

The Mercer Privacy Policy sets out 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.

Material changes or significant events

Direct investors

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

All other material changes or significant events willbe advised in accordance with the requirements ofthe law.

If the change or event is not an increase in fees orcharges, then notice must be given before thechange or event occurs or as soon as practicablewithin 3 months after the change or event occurs.

However, if the change or event is not adverse toexisting direct investors' interests and wereasonably believe that the direct investor wouldnot be concerned about the delay in receiving theinformation, then notice may be provided within 12months after the change or event occurs.

Generally notice 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.

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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.

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.

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.


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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 21).

� In-specie transfers (page 21)

� How to transfer your investment to anotherMercer Multi-Manager Fund (page 21)

� Withdrawal payments (page 22).

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 page 19for 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 on page23.

Please see Transaction costs in the relevant PDS(s)for information on the effect of the buy spread onpayments 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 money 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 20.

The additional investment request should be sentvia fax or mail.

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 manner

disclosed 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 20.

Pending additional investments

An additional investment may be held in therelevant Fund’s bank account for up to one monthby us pending receipt of a properly completedadditional investment request. In the event aproperly completed additional investment requestis not received after one month any bank interestearned will be returned to the sender with theirapplication monies.

In specie transfers

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 in specie transfers are permitted, then any inspecie transfer from another investment vehiclewill need to be agreed between your ServiceProvider and us.

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,


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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 40 businessdays to satisfy a withdrawal request and to extendthis period if appropriate.

The Mercer Cash Fund – Term Deposit Units hasspecific withdrawal terms, which are set out in thePDS for that Fund. Depending on the timing,withdrawing from the Mercer Cash Fund – TermDeposit Units could incur a fee, penalty charge orreduced interest.

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-off timesand the Suspension of units applies to both directand 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 available at mercer.com.au/mmfor by contacting us on 1300 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.


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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GLOSSARYActive management

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

Business day

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

Defensive investments

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

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.

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 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.

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.

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

More than one investment managers is appointedto manage the Fund’s assets. We believe a multi-manager approach is more likely to outperformsingle manager funds through the entire businesscycle, with lower volatility of returns.

Passive management

Passively managed funds are those that buy everysecurity in an asset class, in the same weightings asthey are represented in the relevant index.

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 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.

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.

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