As a GPS Investment Fund Limited (GPS) investor or potential investor, you’re likely familiar with the terms Product Disclosure Statement (PDS) and Information Memorandum (IM). These documents, which are always provided by us at the first step of your investment journey, are crucial in guiding well-rounded investment decisions.
We are often asked where the line of difference is between these documents, and interestingly enough while they may serve differing audiences, at the core they both provide the necessary information to help investors make informed decisions.
What is a Product Disclosure Statement (PDS)?
A PDS is a document required by the Australian Securities and Investments Commission (ASIC) for retail investors. At GPS, we hold an ASIC-approved Australian Financial Services License (AFSL), which mandates our compliance with eight critical benchmarks under ASIC’s Regulatory Guide 45. These benchmarks are designed to ensure the optimal level of disclosure of our funds. Ensuring that our investors are adequately informed and enabling you to better compare our offers to those of our competitors.
The eight ASIC benchmarks focus on:
Liquidity: Ensuring the fund has enough cash and liquid assets to meet its obligations.
Scheme Borrowing: Disclosing any borrowings by the fund. (Fun fact, our funds never have any borrowings.)
Loan Portfolio and Diversification: Managing risk by spreading investments across different loans and borrowers.
Related Party Transactions: Identifying any transactions involving parties with close relationships to the fund or the Responsible Entity that oversees the funds management.
Valuation Policy: Detailing how the fund’s assets are valued.
Loan-to-Valuation Ratios (LVR): Comparing the value of loans to the value of assets used for loan security.
Distribution Practices: Clarifying whether distributions are paid from borrowings.
Withdrawal Arrangements: Outlining withdrawal terms of the fund.
At GPS, we ensure our PDS documents adhere strictly to providing full disclosure concerning these benchmarks, providing our investors with a comprehensive and transparent overview of the fund, its operations, and associated risks.
In addition to the PDS, you likely will have also seen our Supplementary Product Disclosure Statements (SPDS’s). While a PDS relates to your investment in a fund, an SPDS focuses on your investment in a specific project for investors in the GPS Invest Select Funds. These offers detail the project’s specifics and development team, enabling you to best evaluate your investment options.
What is an Information Memorandum (IM), and how is it different?
An IM is a disclosure document offered to wholesale investors. Unlike a PDS, an IM is not regulated by ASIC in the same manner and does not require the same level of detail. Wholesale investors, who are considered more experienced in investment, are regarded by the regulators as being better able to conduct their own due diligence and self-assess the risks of an investment.
At GPS, we have chosen to apply the same rigorous standards of transparency to our IM’s as we do to our PDS’s. Even though the regulators do not require this, we believe that providing comprehensive information in our IM’s is in the best interest of our Wholesale investors.
This commitment to transparency means that our IMs contain a similar level of detail and clarity about our funds, written in a more short-form manner, to appeal to sophisticated investors. Ultimately, whether you’re a retail or wholesale investor, GPS is committed to providing all the information you need to make a fully informed investment decision.
We believe that transparency and thorough disclosure are the cornerstones of trust and confidence in our investment products. Our PDS and IM documents, along with any supplementary information, are designed to give you a clear and comprehensive understanding of the risks, returns, and structure of our investment opportunities.
If you’re considering future investments, or know someone who’s considering investing, we always recommend that you thoroughly review these documents, and pay attention to the details that align with your investment objectives and risk tolerance.
As always, our experienced Investor Services team is always available and happy to chat directly if you have questions at any time:
