Perennial ETF faces uncertain final payout after $2.6 million loss

Perennial Better Future Active ETF (ASX:IMPQ) is heading for closure after a year in which its assets shrank by more than $17 million and its investment portfolio suffered a $3.269 million loss. Perennial Investment Management Limited approved the fund’s voluntary winding up on 11 August, saying it was unlikely to reach the scale required to operate on an economically viable basis over the longer term.

Losses and redemptions cut the fund’s scale

The ETF reported a comprehensive loss of $2.601 million for the year ended 30 June 2026, compared with $408,000 of income a year earlier. The result was driven chiefly by net losses on financial instruments, while dividend and distribution income fell to $964,000 from $1.148 million.

Redemptions were the more consequential balance-sheet event. Unitholders withdrew $15.375 million during the year, against just $820,000 of applications, reducing units on issue from 9.164 million to 5.996 million. Net assets attributable to unitholders fell to $26.197 million from $43.828 million, while the fund paid or owed a distribution of $544,000, equivalent to 9.003 cents per unit.

Orderly wind-up replaces ongoing operations

The fund invested in Australian and New Zealand mid- and small-cap companies selected with environmental, social and governance criteria in mind. Its listed portfolio was valued at $24.832 million at year end, comprising $22.641 million in equities and $2.191 million in listed property trusts, alongside $2.001 million in cash.

The Responsible Entity now expects activities to be limited to realising those assets, settling liabilities and distributing remaining net proceeds in accordance with the constitution. The report does not state the final distribution amount or provide a detailed timetable for the disposal of holdings. Financial statements were therefore prepared on a basis other than going concern, although the directors declared that the Scheme could pay its debts as they fell due.

Auditor highlights valuation of remaining assets

KPMG issued an unmodified audit opinion but drew attention to the non-going-concern basis of preparation. It identified the valuation and existence of the $24.832 million investment portfolio as the key audit matter, given that those assets represented 92% of total assets at 30 June 2026. The auditor said its procedures included checking holdings with the custodian and testing a sample of valuations against quoted market prices.

For unitholders, the central issue has shifted from the ETF’s investment strategy to the mechanics of exit: how efficiently the remaining holdings can be sold, what liabilities and wind-up costs are incurred, and when the residual cash can be returned. The report records no outstanding contingent liabilities or commitments at year end, but it does not quantify costs expected to arise during the closure.