Some funds allow members to choose to their investments and hold segregated investments. Income from those investments accrues only to the member holding that asset.
A fund has two members: Mary and Daniel. Mary wants to invest $50,000 in Telstra shares, believing they have fallen to rock bottom and must rise soon. Daniel disagrees, thinking Telstra is finished.
The Members might agree that Mary can invest part of her Member Balance in Telstra. Those shares then belong to Mary exclusively. All dividends attribute to her and Daniel does not share any profits from those shares.
We refer to an asset not jointly owned by all Fund members as a segregated asset.
Similarly, a member with multiple accounts must decide which account will own a segregated asset. Mary can choose to buy the asset from her Accumulation Account (if it has sufficient funds) or from her Pension Account. Her decision will impact on the balance and of and distribution of profits and losses to the chosen account, but will not impact on any other account she may hold.
When Mclowd distributes profit and loss at the end of a year, it will add dividends and capital gain/loss on Telstra shares and add to Mary’s chosen account, but it will divide the profits from all jointly owned Fund assets between all other member accounts according to their MWA (member weighted average).
Various transaction entry screens will feature an account selection drop-down to enable you to specify whether the transaction you are about to enter affects the Fund globally, or an individual member’s account.