September, 2023
Performance varied over the quarter, with strong relative performance from the defensive risk profile funds, while the growth and high growth performed close to the peer group. The Funds have held defensive exposures within the growth allocation, preferring cash flow resilient companies and energy companies. The Funds underweight exposure to government bonds, with preference to floating credit and cash has strongly benefited the Funds. In which we believe better opportunities exist in corporate debt rather than the equity side of the balance sheet.
Looking forward the Funds are well setup with defensive equities to withstand equity market volatility while producing good income that has historically been absent from the portfolios. The Funds exposure to gold, inflation linked bonds, agriculture and water provide strong diversifiers in an uncertain market regime.
June, 2023
The Funds have underperformed peers over the period. Driving the relative performance was a preference for cash yielding investments, defensive equities and the net underexposure to US technology companies. We believe equity markets are not an attractive proposition at this point given the headwinds to earnings, high valuations and an attractive alternative in fixed income and cash. Whilst we acknowledge equity markets may move higher over the shorter term, we believe a sustained move higher in prices requires robust earnings growth, in which this ingredient is missing from the market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-june-2023-1-1.pdfMarch, 2023
Returns for the quarter were positive across all risk profiles, however lagged the peer group. Share markets rose strongly despite a weak earnings period, buoyed by improved global liquidity conditions. The Funds defensive positioning detracted from relative returns in which more speculative areas of the market performed strongly. Over the period the Funds initiated a new investment in Oaktree Distressed Debt Opportunities, this exposure will take advantage of any dislocations in markets if they eventuate, in which provides additional diversification while potentially increasing returns moving forward. We believe the Funds to be well setup for the market conditions presently and into the future. The Funds have little to no exposure in the troubled areas of commercial property, venture capital and private equity, in which the pricing of these investments are slow to reflective the changing market conditions. The Funds hold defensive exposures across equities, with overweights to strong cash flow, earnings certainty sectors such as health care and consumer staples. The Funds also have many diversifies such as gold, energy, bonds, currencies, agriculture and water, which is expected to provide a relative smoother return for investors moving forward. Further given interest rates rises over the past year, the yields on fixed income investments are now contributing materially to returns.
File:December, 2022
Returns for the December quarter were positive across the risk profiles as risk assets had astrong rally to end the year. Markets began pricing a higher probability of a lower terminalcash rate in the US following the November inflation print that surprised to the downside. Thirdquarter US earnings were also better than expected which buoyed sentiment. Year over yearearnings were boosted by the energy and industrial sectors with gains outstripping declines inother industries. Australian shares recorded an impressive 9.1% return in the 3-month periodending December on the back of improved sentiment and anticipation of China planning toease its Covid restrictions. Active management contribution was mixed. Tactical exposures toEnergy benefitted the Funds. International equity manager Antipodes also aided performance.On the negative side of the ledger, Australian equity managers lagged the benchmark index.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-december-2022-2.pdfSeptember, 2022
Returns for the quarter ending September were negative in absolute terms but were stronger than the benchmark for most risk profiles. The investment team holds underweight exposures to growth assets relative to benchmark given the elevated volatility associated with high inflation and rising cash rates. This has benefitted Fund returns with equities and property underperforming overweight exposures such as Australian investment grade credit, alternatives, and cash over the 3-month period.
The Team remains cautious on interest rate linked investments such as duration (bonds and high price multiple equities) and property. A low hedge ratio to the US dollar has also benefitted the Funds given the currency’s recent strength. Active managers DNR Capital and Janus Henderson both positively contributed to performance in the September quarter. DNR’s overweight to materials boosted relative returns while Janus continues to deliver above benchmark credit income and capital gains through high quality security selection with a focus on improved compensation for risk given rising yields.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-september-2022-1.pdfJune, 2022
Returns for the quarter ending June were negative in absolute terms given all assets except cash returned in the red. However, the Funds outperformed their relative benchmarks over the period. The Funds are significantly underweight growth exposures which have benefitted benchmark and peer relative returns. This has been a challenging environment for asset managers given rising bond yields have put downward pressure on all asset valuations. Under these conditions the team have taken advantage of higher yielding defensive assets in the Funds which will add to core income and within growth exposures have pivoted to assets with greater earnings certainty such as infrastructure.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-june-2022-2.pdfMarch, 2022
The majority of risk profile funds underperformed the Morningstar peer group over the period, falling short of our expectations. Leading to the result was the on-aggregate underperformance of our Australian and global equity managers. The Funds have held tactical positions in inflation-linked bonds, gold, energy and cash, all of which aided given their inflation hedge dynamics. However, the underperformance from the Funds growth equity managers and the lack of protection from our defensive equity managers, led to on-aggregate low returns.
The past quarter has seen a large divergence from the type of investments that worked well over the past decade, with resources now outperforming technology companies. Over the quarter we have acted to down weight underlying managers that we believe are not adapting to the changing environment and introduced several new exposures such as healthcare, consumer staples, energy and increased weights to gold and defensive equity managers in AB Managed Volatility.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-march-2022-1-4.pdfFebruary, 2022
The majority of risk profile funds underperformed the Morningstar peer group over the period, falling short of our expectations. Leading to the result was the on aggregate under performance of our Australian and global equity managers. The Funds have held tactical positions in inflation linked bonds, gold, energy and cash, all of which aided given their inflation hedge dynamics. However, the underperformance from the Funds growth equity managers and the lack of protection from our defensive equity managers, led to on aggregate low returns. Moving forward, the Funds have increased exposure to defensive equity managers and continue to hold exposures in energy, gold, inflation linked bonds and global commodities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-february-2022-1-1.pdfJanuary, 2022
The majority of risk profiles underperformed the Morningstar peer group over the period. Driving the relative return was the underperformance on aggregate of our active equity managers. Over the past six months the market rotated away from high growth companies, and has rewarded cyclical companies such as financials, commodities and energy, in which these sectors benefit from rising inflation.
Aiding performance was the Funds active tilt towards global financials, held through an exchange traded fund. Further benefiting the Fund was the exposure to Ausbil Global Natural resources which has performed well relative to the broader Australian and global equity markets. The Funds have also benefited from a low exposure to fixed government bonds with the inclusion of Metrics Private Credit and investment in Janus Henderson Diversified Credit.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-january-2022.pdfDecember, 2021
Over the December quarter risk profile performance was mixed. Risk profiles holding greater allocations to defensive assets outperformed but those with heavy allocations to growth assets slightly underperformed their relative Morningstar peer group despite positive absolute returns. Active global equity manger, T. Rowe, detracted from returns in the December quarter. The fund underperformed the world equity index (MSCI World Ex Aus) by 8.9%. Stock picks within the information technology and discretionary sectors were the biggest detractors to T. Rowe’s performance over the period. Holdings in companies such as EV producer Rivian and communication technology provider Zoom lost 17.1% and 29.7% respectively. Despite the poor recent performance, T. Rowe’s longer-term performance has been strong, outperforming the broader market since inception. The investment team continues to hold the manager in high regard and believes in its ability to execute on its investment strategy. On the positive side of the ledger, Ausbil was the pick of the managers which benefitted from a rise in commodity prices as inflationary pressures build.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-december-2021-1-1.pdfNovember, 2021
The Funds on aggregate performed in line with the peer group of over the month. In what was a volatile period, there were many winners and losers. On aggregate our global equity managers underperformed, however this was somewhat offset by a strategic position in the Nasdaq 100 ETF which returned over 10% for the month. Australian equities were mixed with new addition of DNR Capital Australian Emerging Companies Fund aiding performance. Given falls in bond yields over the period, positioning in inflation linked bonds and Australian government bonds added to returns. Looking forward, we believe the Funds are well positioned with a good blend of growth drivers (global technology companies, Australian small cap equities), inflation protection (natural resources, inflation linked bonds and gold) and downside protection (government risk free securities and foreign currency exposure).
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-november-2021-4.pdfOctober, 2021
Returns for the month ending October were strong with all risk profiles outperforming their relative peer groups. An underweight to government bonds benefitted the funds as bond yields rose over the month. Inflation expectations picked up in October and bonds sold off as CPI data remains elevated indicating some of the transitory inflationary forces will persist for longer than expected. Performance amongst the Funds active managers were mixed. On the positive side of the ledger, Ausbil global resources outperformed given their battery metal and energy commodity exposures. Fidelity Asia detracted from returns as negative investor sentiment towards China weighed down the asset class. The Funds maintain an overweight to global developed world equities which continue to be underpinned by earnings growth at a premium to rest of world equities due to accelerated vaccine access and economic reopening.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-october-2021-1-3.pdfSeptember, 2021
All risk profiles outperformed the Morningstar peer group over the quarter as strong performance from our active managers boosted returns. The pick of our managers were Bennelong Concentrated Australian equities and Ellerston Australian MicroCap strategy. Bennelong provided returns above the ASX300 of over 7%, while Ellerston provided excess returns of 12.7%. Detracting from returns were positions in emerging markets, in which the dominant exposure being China, was negatively impacted by government interventions in capital markets, a controlled slowdown in credit growth, and fears of property led slowdown, given the collapse of Chinese property developer Evergrande.
Over the quarter the Funds introduced an exposure in natural resource stocks through our addition of manager Ausbil. We believe this exposure provides portfolio diversification protection against supply led inflation as well as protection against rapid climate change. Overall, we believe the Funds are well diversified, with a balance of growth opportunities in Asian equities, global technology and Australian small cap stocks, as well as inflation protection through holdings in gold, natural resources, and inflation linked bonds.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-september-2021-1-2.pdfAugust, 2021
All risk profiles outperformed the Morningstar peer group over the month as strong performance from our active managers boosted returns. The pick of our managers was Bennelong, with the Fund returning 8.7% for the month. Positions in the Nasdaq 100 (6.2% return) and Ellerston Micro Caps (7.5% return) were also strong contributors to the Fund. Recently the Funds introduced an exposure in natural resource stocks through our addition of manager Ausbil. We believe this exposure provides portfolio diversification protection against supply led inflation as well as protection against rapid climate change. We also introduced an exposure to Asian equities, managed by Fidelity, in which provides exposure to the growth thematic of the rising Asian consumer.
Overall we believe the Funds are well diversified, with a balance of growth opportunities in Asian equities, global technology and Australian small cap stocks, as well as inflation protection through holdings in gold, natural resources, and inflation linked bonds.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-august-2021-8.pdfJuly, 2021
Returns for the month of July were strong across the risk profiles as every major asset class returned in the black. Peer relative performance continues to be strong for the funds. Global equities outperformed domestic equities given better than expected quarterly earnings results. Offshore US equity positions buoyed returns given the recent strength of the US dollar. An overweight to gold and inflation linked bonds also benefitted the funds as yields fell while inflation expectations were largely unchanged over the month. Ellerston Australian micro capitalisation equities continued its strong performance in July returning 4.5%, outperforming its benchmark return of 0.7%. Antipodes detracted from returns given the global equity manager’s position in Chinese software/internet incumbents which experienced volatility in July following Chinese regulatory crackdowns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-july-2021-1-2.pdfJune, 2021
Over the quarter investment markets produced high positive returns, resulting in great outcomes across the portfolios. The Funds outperformed the Morningstar peer group over the quarter and over the financial year. Given the strength of the rebound from the Covid lows in March 2020, returns for the financial year ranged from 8.7% for the defensive portfolio up to 27.3% for the high growth.
Active manager performance was mixed, with a rebound in growth and technology stocks aiding performance of T Rowe Price Global Equities and Bennelong Concentrated Australian Equity Fund, while value and defensive managers in AB Managed Volatility and Antipodes Global Equity Fund trailed the benchmark. Positioning in Australian inflation linked bonds over fixed coupon bonds further benefited the Funds.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-june-2021-3.pdfDecember, 2020
From both a peer relative and absolute return perspective, the Wholesale suite of Funds performed well over the quarter. Risk assets across the board all performed strongly, with tilts away from infrastructure towards emerging markets within the growth allocation and positions in inflation linked bonds within the defensive component, both proving beneficial. Active management was mixed with outperformance from T Rowe Price (global equities) benefiting the Funds over the quarter, while AB Managed Volatility (Australian equities) detracted. Looking forward, we believe the Funds are well positioned for any potential rise in inflation with a meaningful exposure to gold, inflation linked bonds and emerging markets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-december-2020-1-2.pdfasset_class: Multi-Asset
asset_category: 41-60% Growth Assets - Multi-Manager
peer_benchmark: Multi-Asset - 41-60% Multi-Manager Index
broad_market_index: Multi-Asset Balanced Investor Index
manager_contact_details: Array
ticker: STL0013AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
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Bendigo Balanced Wholesale aims to deliver investment returns after fees in excess of 3% above inflation over a full market cycle (typically 7 to 10 years). Inflation is measured by the Australian Consumer Price Index as published by the Australian Bureau of Statistics. To invest via a selection of high quality investment managers that specialise in managing specific asset classes. The Fund invests across the asset classes of Australian shares, international shares, property securities, Australian fixed interest, international fixed interest and cash.
structure: Managed Fund