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Frequently asked questions

Plain answers about Arculus, the two funds and private mandates. If your question is not here, ask us through the Contact page.

About Arculus

What does Arculus do?

Arculus Funds Management is an Australian fixed income manager, operating since 2013. It is a corporate authorised representative of GCI Australia Pty Ltd (AFSL 346034). We manage over $1.2bn AUD across two retail unit funds and a number of wholesale strategies and private mandates for family offices, charities, wealth advisory groups and APRA-regulated life insurers. Capital preservation, liquidity and income consistency underpin everything we do.

What is your investment philosophy?

Capital preservation first. We are an absolute return manager, benchmark unaware, with no duration target: we vary duration at different points in the cycle. We charge no performance fee on any fund, so we are not incentivised to take risk in an asset class where return is driven by the coupon.

What is the four-eyes principle?

Every transaction passes through four parties: Arculus as investment manager and three independent of it, the Responsible Entity (DDH Graham Limited for the retail funds), the fund administrator and the custodian. Arculus does not hold the assets, value them or price the units; mark-to-market valuation and unit pricing are done outside Arculus. That keeps valuation independent of the manager.

The funds

What funds do you offer?

Two registered managed investment schemes, with DDH Graham Limited as Responsible Entity:

  • Arculus Fixed Income Fund (APIR DDH8305AU, ARSN 622 419 578): low-volatility income from Australian sovereign and senior bank bonds only. Every holding must be repo-eligible, meaning a bank could lend it to the Reserve Bank for cash, which is the most liquid end of the Australian bond market.
  • Arculus Preferred Income Fund (APIR DDH0001AU, ARSN 108 161 575): a domestic fixed income portfolio of government, semi-government, corporate senior and subordinated bonds, ASX-listed hybrids and cash, all in Australian dollars.

What is the target return?

  • Fixed Income Fund: 90-day BBSW + 1.5% p.a. before fees.
  • Preferred Income Fund: 90-day BBSW + 3.5% p.a. before fees.

Target returns are not guaranteed. Past performance is not an indicator of future performance.

What do you not invest in?

Both funds: no leverage, directly or through derivatives; no foreign currency; no structured credit; no securitised or property exposure (RMBS, ABS, CMBS, property loans); Australian issuers only, in Australian dollars. Fixed Income Fund in addition: no shorting, no offshore issuers, nothing outside sovereign and senior bank paper.

How liquid are the funds?

Both funds are priced daily and accept applications and redemptions daily under their PDS. The Fixed Income Fund holds only repo-eligible securities. Buy/sell spreads are +0.10% / −0.10% (Fixed Income Fund) and +0.15% / −0.15% (Preferred Income Fund).

What are your fees?

Fixed Income Fund: management fee 0.40% p.a. including GST (0.368% plus GST). Preferred Income Fund: 0.72% p.a. including GST. No performance fee on either fund. Minimum initial investment $2,000. Full fee disclosure is in each fund's PDS.

Are the funds rated?

Both funds are rated 'Investment Grade' by Lonsec. Ratings are opinions of the relevant research house, are not recommendations, and may change without notice.

How do I invest?

Directly online through Olivia123 (one application per fund, with identity verification in the same step); through your adviser; or on the BT Panorama, Allan Gray, HUB24 and Netwealth platforms. Read the PDS and Target Market Determination first; both are on each fund's page and in the Document library.

Private mandates

Do you offer private mandates?

Yes. Alongside the two retail funds we manage several private mandates for family offices, charities, wealth advisory groups, high-net-worth individuals and APRA-regulated life insurers. It is a core part of the business.

What is a private mandate at Arculus?

A bespoke portfolio managed by Arculus under a discretionary investment management agreement, holding bonds rated investment grade by S&P, Fitch or Moody's, with capital preservation and liquidity in all market conditions as the primary objectives.

How is a private mandate different from the funds?

The funds have a set investment universe and a PDS. A private mandate is built to your investment policy statement: you set the rating floor, duration, sector and issuer limits, franking preference, ESG screens and cash-flow needs. You retain beneficial ownership of the assets; Arculus acts as investment manager only.

Who appoints Arculus, and how is a mandate controlled?

The same four-eyes model. You appoint Arculus as investment manager through your trustee or company. Your custodian holds the assets and your administrator prices them. Arculus never holds client money.

What size are your private mandates?

Typically institutional size, but we are flexible. Contact us to discuss. We manage across $1.2bn, so we have scale in Australian bank paper.

Can you manage to a specific income target?

Yes. Many family office mandates are set to a cash-plus-margin target or a fixed running yield, for example BBSW + X%, with a maximum volatility constraint.

How do I get in touch?

Through the contact form, or by email and phone on the Contact page. Wholesale strategies and private mandates are discussed directly with the investment team.

Important information

Arculus Funds Management Pty Ltd (ABN 74 661 739 340) is an Authorised Representative (No. 1298896) and wholly owned subsidiary of GCI Australia Pty Ltd (ABN 68 140 364 576; AFSL No. 346034). Arculus Funds Management is authorised by GCI Australia to provide particular financial services to those who qualify as a ‘Wholesale Client’ in accordance with the Corporations Act.

This website has been prepared and issued by Arculus Funds Management to provide you with general information only. It is not intended to take the place of professional advice and you should not act on a recommendation or statement of opinion without first considering the appropriateness of the general advice to your personal circumstances or consulting your investment advisor to determine whether the recommendation or statement of opinion is appropriate for your investment objectives, financial situation or needs. Neither Arculus Funds Management, DDH Graham Limited nor any of their related parties, their employees or directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the relevant Product Disclosure Statement before making a decision about whether to invest in any product.