Magellan FuturePay
A growing monthly income, now and into the future

Glossary

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Active ETF

 

Magellan’s Active ETFs are actively managed investment funds that are quoted on a securities exchange and can be bought and sold just like any listed stock. These funds provide investors with easy access to the benefits of investing in global equities and the investment experience and expertise of Magellan.

 

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Inflation target

One of the key benefits that FuturePay aims to deliver is to grow investors’ capital at or above the rate of inflation, even after delivering the target monthly income payments.

FuturePay 's inflation target – referred to as the ‘Index Unit Price’ in the Product Disclosure Statement – is the way Magellan measures whether it is meeting this objective.

If the value of FuturePay ’s investment portfolio is above the inflation target – this means that FuturePay has both delivered the target monthly income and the value of its investment portfolio has grown at or above the rate of inflation.

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MFG Reserve Facility

If the assets in the Support Trust are low, FuturePay can borrow additional funds from Magellan Financial Group to support FuturePay in paying the target monthly income to investors.

This is only repayable when the Support Trust reserves have been recovered and FuturePay outperforms its inflation objective.

Mutualisation Amount

The amount you leave behind if you redeem your investment in FuturePay off-market, directly with the Responsible Entity. The Mutualisation Amount is retained by FuturePay for the benefit of remaining investors.

The Mutualisation Amount is equal to the value of the Support Trust Rights, subject to a cap. The Mutualisation Amount is capped at an amount approximately equal to 7.5% of the estimated NAV per Unit of FuturePay – so when the value of the Support Trust Rights exceeds that cap, these amounts will differ.

When an investor withdraws off-market, directly from FuturePay, the exit price they receive will be the NAV per Unit less the Mutualisation Amount and an allowance for transaction costs.

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Portfolio Value

A measure of the size of the assets of FuturePay or the Support Trust (as the case may be).

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Reserve Ratio

The Reserve Ratio is a measure of the relative size of the assets of the Support Trust to the assets of FuturePay.

It is calculated by dividing the Portfolio Value of the Support Trust by the Portfolio Value of FuturePay.

Responsible Entity

Magellan Asset Management Limited is the responsible entity of FuturePay.

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Support Trust

The Support Trust is a separate pool of assets managed for the benefit of FuturePay investors. It is structured as a discretionary trust.

The Support Trust’s objective is to assist FuturePay in delivering a predictable monthly income to investors over the long term.

Amounts contributed from the assets of FuturePay to the Support Trust are not paid to investors if they redeem out of FuturePay. This money remains pooled in the Support Trust for the benefit of all remaining investors, as it did when you were invested. 

Support Trust Rights

The legal rights that the Responsible Entity of FuturePay holds in relation to the Support Trust by virtue of being a named beneficiary of the Support Trust.

The Net Asset Value of FuturePay includes the value of the Support Trust Rights, which is determined daily based on the Responsible Entity’s assessment of the expected benefit provided by the Support Trust.

The value of the Support Trust Rights will typically be less than the full value of the assets held by the Support Trust.

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Target Monthly Income

The target cash distribution that FuturePay intends to pay investors each month, which the Responsible Entity intends to adjust for inflation on a quarterly basis.

The current value of the target monthly income is available here.

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