Corporate expense ratio (MER)
The investment management agreement with KFM provides for the payment of an investment management fee of 0.4% per annum. Performance is measured by reference to the one year interest swap rate plus 6%. This aligns with current interest rates and approximates to 7.8% per annum. The investment return includes the benefit of franking credits received in the calculation. The performance fee benchmark commenced in the 2015 financial year. A highwater mark applies within each 3 year reset period.
The Board estimates the MER for FY2018 will continue to be less than 1%.