September, 2023
Returns for the quarter were slightly below the peer group across the five risk profiles. Aiding returns was the Funds underweight to equities and bonds which both fell over the period. Detracting from peer relative returns, was the absence of unlisted assets such as private equity, unlisted infrastructure and property.
The Funds hold a large exposure to income generating investments such as cash and corporate bonds, whilst we are cautious on equity markets due to valuations and potential growth headwinds as a result of rising interest rates.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-september-2023-9.pdfJune, 2023
Returns relative the benchmark where mixed over the period. Aiding performance was the underweight to global fixed income with preference to Australian inflation linked bonds and cash. Detracting from performance was the underweight exposure to global equities with a preference for cash yielding investments. 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.pdfMarch, 2023
Returns for the quarter were positive across all risk profiles with the Funds on average performing in line with the peer group. Aiding returns was positions in gold, in which rallied on concerns of bank failures within the US. Detracting from relative returns was underweight exposures to equities. The Funds continue to be positioned cautiously given our view that growth will continue to slow as global central banks hold interest rates in restrictive territory. More recently we have experienced an increase in liquidity within markets that has seen some reduction in the volatility that was experienced over the past year. Looking forward there are many uncertainties present within markets and we believe a well diversified portfolio across currencies, geographies, bonds, equities, gold and cash to be beneficial in smoothing returns over the upcoming period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-march-2023-1.pdfDecember, 2022
Returns for the December quarter were strong in absolute terms but laggedthe Benchmark across the risk profiles as risk sentiment improved over theperiod. The Funds are underweight growth assets relative to the benchmarkgiven the Team’s outlook for economic growth. Markets began pricing ahigher probability of a lower terminal cash rate in the US following theNovember inflation print that surprised to the downside. This buoyed riskappetite as lower terminal rates are positive for valuations. However, theteam remains cautious on the outlook for earnings and valuations remainelevated which has the Team more cautious on recent market optimism.Despite the rally, global equities finished the calendar year 18.1% lower. TheFunds are well diversified and are positioned for a range of outcomes ascentral banks try to engineer a soft landing in their pursuit of reducinginflation.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-december-2022-1-2.pdfSeptember, 2022
Returns for the quarter ending September were negative in absolute terms but were stronger than the benchmark for all 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 as forward indicators of growth soften and interest rate differentials grow making the greenback appealing to investors seeking higher yields.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-september-2022-6.pdfJune, 2022
Returns for the quarter ending June were negative in absolute terms given allassets except cash returned in the red. However, the Funds outperformedtheir relative benchmarks over the period. The Funds are significantlyunderweight growth exposures which have benefitted benchmark and peerrelative returns. This has been a challenging environment for asset managersgiven rising bond yields have put downward pressure on all asset valuations.Under these conditions the team have taken advantage of higher yieldingdefensive assets in the Funds which will add to core income and withingrowth exposures have pivoted to assets with greater earnings certaintysuch as infrastructure.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-june-2022-5.pdfMarch, 2022
Returns for the period fell short of the Morningstar peer group. Driving the relative return was the lack of exposure to unlisted investments such as private equity, unlisted property, infrastructure and private credit. Given the index, low-cost nature of the Funds, unlisted investments are not currently invested in. Unlisted investments adopt less frequent valuations and hence they are not subject to short term market volatility. Over the quarter we increased weights to Australian equities and global infrastructure, given the favourable dynamics for these asset classes. We have also reduced global credit exposure through our defensive sleeve due to our perception that credit spreads will move outwards.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-march-2022-4.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 6.7% for the defensive portfolio up to 28.4% for the high growth. Positioning in Australian inflation linked bonds over fixed coupon bonds benefited the Funds. Inflation linked bonds offer protection within the portfolio against rising inflation and will outperform fixed coupon bonds when inflation rises faster than market interest rates. Detracting from performance was overweight positions in emerging markets which underperformed developed world equities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-june-2021-6.pdfDecember, 2020
From both a peer relative and absolute return perspective, the Index suite of Funds performed strongly over the quarter. Risk assets across the board all rose sharply, with tilts in favour of emerging markets coupled with an underweight to global infrastructure, proving beneficial.
Over the one year period the standout performer was the Bendigo Defensive Index Fund, in which returned over 3% higher than the Morningstar peer group and was the highest returning fund within its Morningstar peer group and the Bendigo index suite of products. Driving performance was the movement away from fixed bonds into inflation linked bonds through the late March and April market recovery.
Recently the Funds have added an alternatives asset class with the intention of including an exposure to gold, in which we believe adds significant diversification benefits, in particular inflation risk protection. Looking forward, we believe the Funds will be 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.pdfasset_class: Multi-Asset
asset_category: 0-20% Growth Assets - Multi-Manager
peer_benchmark: Multi-Asset - 0-20% Multi-Manager Index
broad_market_index: Multi-Asset Conservative Investor Index
manager_contact_details: Array
ticker: STL0031AU
release_schedule: Quarterly
commentary_block: Array
factsheet_url:
Latest Performance Report
fund_features:
Bendigo Defensive Index aims to deliver investment returns after fees in excess of 1.5% above inflation over a full market cycle (typically 7 to 10 years).
- To invest via a selection of index funds and cash that seek to track the performance of selected benchmarks for each asset class.
- The Fund invests predominantly in income generating defensive assets (Australian fixed interest, international fixed interest and cash) whilst limiting exposure to growth assets (Australian shares, international shares and property securities).
structure: Managed Fund