WDE is designed to offer investors exposure to the long-term returns of the Australian sharemarket, while removing much of the risk with a “dynamic protection matrix”.
It says it will protect by 50% against market downturns by actively managing allocations between equities, derivative protection and cash through market cycles. It focuses on protecting the “most likely loss” range of the investment portfolio.
It will be an ASX-listed investment company investing predominantly in ASX-listed entities, as well as derivative and cash. The manager is Perennial Value Management.
WDE had sought to raise a minimum A$50 million and a maximum A$160 million under its offer, converting to shares upon listing. Each IPO shareholder receives loyalty options on a one-for-one basis which vest after six months and are exercisable at $1 over the subsequent 12 months.
It said it was on track to list on the ASX at the end of May.
Founder and managing director of portfolio manager Perennial Value Management John Murray said there was strong demand for the investment strategy.
“Support amongst brokers, financial advisers and self-directed investors for the underlying WDE investment capability has been very strong, demonstrating that the timing for WDE's IPO is spot on. We have received consistent feedback that WDE is an investment that is built right for these times,” he said.
Murray said the benefit resonating most for advisers is gaining cost-effective downside protection for investors, self-managed super funds and pre-retirees.
Perennial head of retail funds management Brian Thomas said it would appeal to accumulators and decumulators.
Investors’ risk appetite had dropped away after the global financial crisis, he said. “If we can protect 50% of the fall in the next GFC they will only need a 33% return to get back to where they were. That’s the reason we built this product.”
Being benchmarked to the full index provided better investor protection, he said.
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