All eyes are found to be tuned towards the Switzer Dividend Growth Fund (SWTZ) that is seeking quotation on the ASX Platform in February 2017. Switzer Asset Management Limited is the responsible entity and has planned for the offering to raise a minimum of $10 million. The group has appointed Contango Asset Management Limited (ASX: CGA) as the Investment Adviser for the Switzer Dividend Growth Fund. This is expected to become the third listed product in Contango’s kitty to share space with Contango MicroCap Limited and Contango Income Generator.

Set to provide consistent dividends and long term capital growth: The Fund is a new large cap Exchange Traded Managed Fund Product (ETP) and aims to provide tax-effective income and long-term capital growth to investors through a core portfolio of high-yielding blue-chip Australian shares (30-50 stocks). The capital returns are expected to be delivered in consensus with the market along with a lucrative franked income stream to be paid on a quarterly basis. Moreover, the companies in the portfolio are expected to have moderate to low volatility with strong secondary market liquidity. The Fund is said to be one of a kind in the local market to pay quarterly dividends (in January, April, July and October). Although, the offering prospectus does not reveal the franking but the same is expected to be around 80% as per market speculation. Other key aspects highlight that the Fund will be simple to use and will serve as a low-cost vehicle giving investors access to experienced investment professionals in Australia including Peter Switzer, Charlie Aitken, George Boubouras and Paul Rickard.

Mutual benefits: Contango will provide fund administration and investment services to the Fund, and in turn, the new product will help the group expand its offerings. With this move, the group will have a diverse range of investment expertise, managing different investment mandates and accessing different market sectors.

Risks: Investors do not have a cooling off rights. Further, typical investment risks prevail and may include possible delays in repayment and loss of income and principal invested. Another thing to note is the AQUA market risk with regards to liquidity of the units.
The initial offer period opened on January 30, 2017 and will close on February 17, 2017. Units can be bought and sold in the secondary markets like ASX listed securities. Application price for each unit is $2.50.

Keeping the above features and risks in mind, investors with a good appetite for risk may consider the offering.


Key Dates for the Offer (Source: Company Prospectus)

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