Target Market Determinations

Target Market Determinations

A Target Market Determination (TMD) sets out the target market for the relevant Fund, along with the distribution conditions, review triggers and certain other information. It forms part of Macquarie Investment Management Australia Limited's design and distribution framework.

A TMD is not a product disclosure statement and is not a summary of a Fund's features or terms. A TMD does not take into account the investment objectives, financial situation or needs of any person. In deciding whether to acquire or continue to hold an investment in a Fund, a consumer should consider the relevant Fund’s product disclosure statement.

Contact us if you would like to request a copy of a TMD that has ceased to apply.

Term Definition
Consumer’s investment objective
Capital growth Seek to invest in a Fund designed to generate capital return. Prefer exposure to growth assets (such as shares or property) or otherwise seek an investment return above the current inflation rate.
Capital preservation Seek to invest in a Fund to reduce volatility and minimise loss in a market downturn. Prefer exposure to defensive assets (such as cash or fixed income securities) that are generally lower in risk and less volatile than growth investments.
Capital guaranteed Seek a guarantee or protection against capital loss while still seeking the potential for capital growth (typically gained through a derivative arrangement). Would likely understand the complexities, conditions and risks that are associated with such funds.
Income distribution Seek to invest in a Fund designed to distribute regular and/or tax-effective income. Prefer exposure to income-generating assets (typically, high dividend-yielding equities, fixed income securities and money market instruments).
Consumer’s intended Fund use
(as percentage of assets available for investment excluding family home)
Solution/Standalone
(75% to 100%)
Intend to hold the investment as either a part or the majority (up to 100%) of total investable assets.

Typically prefer exposure to a Fund with at least a ‘High’ portfolio diversification. This is described as highly diversified across either asset classes, countries or investment managers – for example, Australian multi-manager balanced fund or global multi-asset product (or global equities).
Core component
(25% to 75%)
Intend to hold the investment as a major part (up to 75%) of total investable assets.

Typically prefer exposure to a Fund with at least ‘Medium’ portfolio diversification. This is described as exposure to one to two asset classes, single country, broad exposure within an asset class – for example, Australian equities All Ordinaries.
Satellite
(Less than 25%)
Intend to hold the investment as a smaller part (up to 25%) of total investable assets.

Likely to be comfortable with exposure to a Fund with ‘Low’ portfolio diversification. This is described as exposure to a single asset class, single country, moderate number of holdings – for example, high conviction Australian equities.
Consumer’s investment timeframe
Short
(Less than or equal to two years)
The consumer has a short investment timeframe and may wish to redeem within two years.
Medium
(More than two years and less than or equal to eight years)
The consumer has a medium investment timeframe and is unlikely to redeem within two years.
Long
(More than eight years)
The consumer has a long investment timeframe and is unlikely to redeem within eight years.
Consumer’s risk (ability to bear loss) and return profile
Low Seek a financial product that is conservative or low risk in nature, seek to minimise potential losses (for example, have the ability to bear up to one negative return over a 20-year period (SRM 1 to 2)) and comfortable with a low target return profile.

Typically prefer defensive assets such as cash and fixed income.
Medium Seek a financial product that this moderate or medium risk in nature, seek to minimise potential losses (for example, have the ability to bear up to four negative returns over a 20-year period (SRM 3 to 5)) and comfortable with a moderate target return profile.

Typically prefer a balance of growth assets such as shares, property and alternative assets and defensive assets such as cash and fixed income.
High Seek a financial product that is higher risk in nature and can accept higher potential losses (for example, have the ability to bear up to six negative returns over a 20-year period (SRM 6)) in order to target a higher target return profile.

Typically prefer predominantly growth assets such as shares, property and alternative assets with only a smaller or moderate holding in defensive assets such as cash and fixed income.
Very high More aggressive or very high risk appetite, seek to maximise returns and can accept higher potential losses (for example, have the ability to bear six or more negative returns over a 20-year period (SRM 7) and possibly other risk factors, such as leverage).

Typically prefer growth assets such as shares, property and alternative assets.
Consumer’s need to withdraw money
Daily/Weekly/Monthly/Quarterly/Annually or longer Seek to invest in a Fund which permits redemption requests at this frequency under ordinary circumstances and the issuer is typically able to meet that request within a reasonable period.
DISTRIBUTOR REPORTING REQUIREMENTS
This part is required under section 994B(5)(g) and (h) of the Act.
Reporting requirement Reporting period Which distributors this requirement applies to
Complaints (as defined in section 994A(1) of the Act) relating to the Fund’s design, availability or distribution. The distributor should provide all the content of the complaint, having regard to privacy. Within ten business days following end of calendar quarter All distributors
Details of any significant dealing in the Fund outside of the target market (where a significant inconsistent dealing is determined in the same way as for section 994F(6) of the Act). Please refer below for further detail. As soon as practicable but no later than ten business days after distributor becomes aware of the significant dealing outside of the target market All distributors
To the extent a distributor is aware, dealings in the Fund (whether or not significant) outside of the target market, including reason why dealing was outside of the target market. Within ten business days following end of calendar quarter All distributors
Any information the issuer reasonably requires in order to assess the distributor's arrangements for compliance with Part 7.8A of the Act and/or to identify promptly whether a review trigger or other similar event or circumstance has occurred. Within ten business days after distributor receives notice of the required information All distributors

To report information to Macquarie Investment Management Australia Limited as outlined in the TMD for each Fund, please:

  1. provide the required information (example of MAM reporting template), and
  2. email your information to MAMDDO@macquarie.com.
Significant dealings

Section 994F(6) of the Act requires distributors to notify the issuer if they become aware of a significant dealing in the product that is not consistent with the TMD. Neither the Act nor ASIC defines when a dealing is ‘significant’ and distributors have discretion to apply its ordinary meaning.

The issuer will rely on notifications of significant dealings to monitor and review the product, this TMD, and its distribution strategy, and to meet its own obligation to report significant dealings to ASIC.

Dealings outside this TMD may be significant because:

  • they represent a material proportion of the overall distribution conduct carried out by the distributor in relation to the product, or
  • they constitute an individual transaction which has resulted in, or will or is likely to result in, significant detriment to the consumer (or class of consumer).

In each case, the distributor should have regard to:

  • the nature and risk profile of the product (which may be indicated by the product’s risk rating or withdrawal timeframes),
  • the actual or potential harm to a consumer (which may be indicated by the value of the consumer’s investment, their intended product use or their ability to bear loss), and
  • the nature and extent of the inconsistency of distribution with the TMD (which may be indicated by the number of red or amber ratings attributed to the consumer).

Objectively, a distributor may consider a dealing (or group of dealings) outside the TMD to be significant if:

  • it constitutes more than half of the distributor’s total retail product distribution conduct in relation to the product over the reporting period,
  • the consumer’s intended product use is solution/standalone, or
  • the consumer’s intended product use is core component and the consumer’s risk (ability to bear loss) and return profile is low.