IMPORTANT NOTICE: Please note that the RARE Infrastructure Value Fund will move to a new Product Disclosure Statement (Issue 4), with amended application form and address details, from 31 March 2010. The RARE Series Value Fund and the RARE Series Emerging Markets Fund will also move to a new Product Disclosure Statement (Issue 2), with amended application form and address details, from 31 March 2010. Any applications submitted on or after this date must be completed on the new application form. The updated documents will be available on the RARE website from 31 March 2010.

investment process

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Investment fund manager, RARE Infrastructure, conducts a series of rigorous quantitative and qualitative assessments of individual stocks to create a balanced portfolio for each of its infrastructure investment products. They are:

  • The RARE Value strategy (30-60 listed securities in developed countries)
  • The RARE Emerging Markets strategy (25-60 listed securities in developing countries)

RARE takes a bottom-up approach when assessing stocks for investment. Its highly experienced team of specialist global infrastructure investment managers undertake thorough research and analysis of each stock and also meets with the managers, competitors and regulators of the companies they are considering for investment.

The key goals are to build and manage high quality portfolios exhibiting attractive risk/return characteristics, liquidity and superior medium to long term returns.

Portfolios are constructed as a result of individual stock selection and independent of any index, market benchmark or external information, such as broker reports. RARE forms its own view of fair value and sets its own buy and sell limits.

Step 1 – Global Universe

Screening of 40,000 global listed securities.

Step 2 – RARE Universe

Ongoing review of approximately 1200 global listed infrastructure stocks that exhibit investment characteristics of infrastructure, including asset duration, monopoly market positions, inflation protection, etc.

Step 3 – Investment Universes
Value Product – RARE 200 Emerging Markets Product – RARE EM150
Those stocks meeting RARE’s stringent investment criteria, including a minimum market capitalization of USD500 million.Further analysis of 200-250 stocks considered prime potential investment opportunities. Those stocks meeting RARE’s stringent investment criteria, including a minimum market capitalization of USD100 million and at least 50% of earnings (before interest, tax, depreciation and amortization) from emerging markets.
Step 4 – Focus List, a subset of the investment universes
Only the ‘best in class’ stocks are selected for further infrastructure research.Thorough bottom-up analysis of 120+ individual stocks using sector specific parameters, including a comprehensive review of the infrastructure companies. Only the ‘best in class’ stocks are selected for further infrastructure research.Thorough bottom-up analysis of 80+ individual stocks using sector specific parameters, including a comprehensive review of the infrastructure companies.
Step 5 – Investment

Selection of stocks for inclusion in the model portfolios for RARE’s two global infrastructure products.

RARE’s Investment Process

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An outline of the RARE investment process