Ann: Innovative SelfWealth ETF to start trading on the ASX, page-9

What absolute rubbish chhaynemo007. Have a look at where revenue growth is currently coming from. On the best possible forecast for ETF revenue for FY 2020 it would represent less than 10% of SWF revenue.

The IIR report suggested that FY 2020 revenue from the ETF would be $750k. It does not say what assumptions where used to get to that figure. ie When they assumed it would launch and it does not state that the Seed Capital would not earn fees. At $750k of revenue it would imply that the ETF would attract $150m of new capital in FY 2020.

We know this assumption cannot be true as they stated previously that their assumption was for growth of $50m per annum. This leads me to conclude that IIR were under the impression from the company at the time of writing the report that seed funding would indeed be included in the fee calculation.

Either SWF misled IIR in the preparation of the report or the delayed release may in fact be due to the commercial arrangement regarding fees on the Seed Funding being in dispute- until now. (This is pure speculation on my part and has no grounding in fact)

OR....

This paragraph from the IIR report spells out that Seed Capital does not attract revenue fees for SWF. It is poorly worded and I can state clearly that I do not understand its meaning. Others may care to comment.

Of the 0.88% MER, SelfWealth derives 0.48%. The residual is split between the ResponsibleEntity (ETFS Australia Pty Ltd) and effectively a return to ETFS Capital on the $100m in tiedup seed capital. In relation to the latter, investors should note that they are effectively payingan ongoing fee for the benefit of the $100m in seed capital. However, the other way to lookat this is that a highly experienced participant in the global ETF sector has not only ‘approved’the methodology and ETF on the basis of detailed due diligence but that approval has beenbacked up by a significant proportion of its own money and that ETFS Capital has a strongvested interest in the success and FUM growth of SELF. Investors can take a high degreeof comfort from that, and which effectively represents a mitigation of investment risk. Apayment of a small component of the overall fee for this makes investment sense, in IIR’sview.

Either way- how IIR got to a revenue calculation of $750k remains a mystery to me.

Having said all that. I am not remotely disappointment in this announcement. I look forward to seeing what my 700k plus shares in SWF look like in about 3-4 years from now.

Looking forward to margin lending and international markets in CY 2020...

MJB