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-2023-7.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-2023-2.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:December, 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.pdfSeptember, 2022
Fund performance for the September quarter was 4.36% (net of fees) versus the benchmark return of 4.82%, as measured by the S&P/ASX Emerging Companies Accumulation Index and the reference index return of -0.47% as measured by the S&P/ASX Small Ordinaries Accumulation Index. The macro trumped the micro throughout the month of September, which accelerated the downdraft in equity markets. All eyes were on the Federal Reserve after a series of strong economic data which would likely result in an increasingly hawkish central bank. In a twist, good news suddenly seemed bad for equity markets, all of which indicate that a Fed pivot is not yet on the immediate horizon and the prospect of an economic hard landing will not derail the Fed from reaching their price stability goals.
The Fund marginally underperformed the benchmark in a volatile quarter by -0.45% (net of fees), however it convincingly outperformed the Small Ordinaries Index by 4.84% (net of fees). The Fund benefited from strong earnings results from Lovisa, Data#3 and Tuas, and from industrial positions in PSC Insurance, Life360 and PWR Holdings. Energy and Materials also supported returns through exposure to rising energy prices and battery materials. The Fund retains its focus on high-quality companies with strong balance sheets, low gearing and recurring earnings that can see through the economic and market uncertainty, and selectively added to positions over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-september-2022.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-2022-1.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-2022-1-3.pdfFebruary, 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 such as the events of January. Over the month active tilts away from interest rate sensitive investments such as fixed government bonds and exposures to gold both benefited the Funds.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-february-2022-2.pdfJanuary, 2022
The majority of risk profiles underperformed the Morningstar peer group over the period. 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 such as the events of January. Over the month active tilts in emerging markets and underweight positions in interest rate sensitive investments such as fixed government bonds both benefited the Funds.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-january-2022-1.pdfDecember, 2021
Over the December quarter every risk profile outperformed their respective Morningstar peer group. Additive to relative performance was the Funds underweight exposure to rate sensitive assets and overweight to inflation linked bonds. An overweight to the growth side of the ledger, also benefitted returns as global developed equities returned 7.9% over the period. Detracting from returns was a slight overweight to Emerging market equities. Emerging markets have trailed developed world equities significantly since March 2021. The divergence is due to China holdings in the index which have been negatively impacted by government interventions. The measures are targeted at anticompetitive practices conducted by dominant.
technology platforms in China and a controlled slowdown in credit growth due to fears of excessively valued dwellings. The recent actions from the Chinese government are aimed at creating a more sustainable pathway to growth, by reducing household debt and encouraging fair competitior.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-december-2021-5.pdfNovember, 2021
The Funds on aggregate performed in line with the peer group of over the month. Aiding performance was the Funds foreign exposure in which given the falls in the Australian dollar, buffeted equity market weakness. Given falls in bond yields over the period, positioning in inflation linked bonds and Australian government bonds both added to returns. Looking forward, we believe the Funds are well positioned with a good blend of growth drivers (global technology companies) as well as inflation protection (inflation linked bonds and gold) and downside protection (government risk free securities, foreign currency exposure).
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-november-2021-2-1.pdfOctober, 2021
Returns for the month ending October were mixed with Defensive and Conservative risk profiles underperforming their relative peer groups while Balanced through to High Growth profiles fared better relative to their peers. October was difficult for fixed income investments due to rising bond yields. 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. Pleasingly, global developed world equity exposures benefitted the funds with corporate earnings exceeding expectations driving equities higher over the month.
October was a mixed month for asset returns. On the growth side of the ledger, developed world equities (measured by the MSCI World Ex Australia index) returned 1.7%, as corporate earnings were stronger than expected. As of writing, US corporates have reported double digit earnings growth despite fears of risinginflation and pressure on profit margins. Conversely, fixed interest investments came under pressure due to rising bond yields. Central banks’ stance that higher inflation is largely transitionary was challenged by the bond market in October as selling resulted in yields moving higher. Annual CPI prints have risen to levels that are now within or above target bands of many central banks (2-3%). Higher energy prices, housing costs and supply chain constraints have played a role in driving expectations for further tapering of bond purchases and cash rate movements earlier than previously thought. Australian bonds, as measured by the Bloomberg Ausbond Govt 0+ Year Index, returned -3.6% in October.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-october-2021-1-2.pdfSeptember, 2021
Over the quarter the majority of index funds marginally underperformed the Morningstar peer group. Detracting from relative performance was the Funds overweight exposure to emerging markets and inflation linked bonds. Emerging markets have trailed developed world equities significantly since March of this year. The divergence largely relates to China holdings in which Chinese equities have been 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. The recent actions from the Chinese government are aimed at creating a more sustainable broad growth path, by reducing household debt and limiting corporate monopolies.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-september-2021-5.pdfAugust, 2021
All Bendigo Index Funds outperformed the Morningstar peer group over the month. Contributing to returns was the Funds bias to growth assets over defensive, in which equity markets on aggregate performed strongly, particularly high growing companies such as technology stocks. Detracting from relative performance was the Funds’ overweight exposure to emerging markets and inflation linked bonds. Emerging markets have trailed developed world equities significantly since March of this year. The divergence largely relates to China holdings in which Chinese equities have been negatively impacted by the Chinese government intervention in capital markets and further the appreciation of the USD which is a negative drag on emerging market economies.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-august-2021-7.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.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-july-2021-5.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-2021-4.pdfMay, 2021
Returns for the month ending May were strong across all risk profiles as every major asset class had positive returns. Inflation expectations rose over the month, while bond yields remained stable. This resulted in strong returns for the Funds allocation to gold and Australian inflation linked bonds. The Funds maintain a bias towards Australian equities given the large weighting to resource companies and banks, in which resources continue to be supported by strong global demand, and banks which are supported by strong credit growth.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/fund-performance-report-may-2021-4.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-2020-3.pdfasset_class: Multi-Asset
asset_category: 41-60% Growth Assets - Low-Cost Diversified
peer_benchmark: Multi-Asset - 41-60% Low-Cost Index
broad_market_index: Multi-Asset Balanced Investor Index
manager_contact_details: Array
ticker: STL0033AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://www.bendigobank.com.au/personal/investing/managed-funds/bendigo-balanced-index-fund/#Reports
LATEST PERFORMANCE REPORT
fund_features:
Bendigo Balanced Index Fund aims to create wealth, by investing in a selection of index funds that seek to track the performance of selected benchmarks for each asset class. The Fund’s dynamic asset allocation aims to achieve a better outcome for investors than the static performance benchmark. Its objective is to deliver investment returns after fees in excess of 3% above inflation over a full market cycle (typically 7 to 10 years). Sandhurst has appointed Vanguard as the asset manager of Australian shares, international shares, property securities and Australian and international fixed interest. Vanguard has established a reputation in Australia as an index specialist providing low cost indexed solutions to investors. Sandhurst manages the asset allocation, portfolio management and cash. The neutral position of the Fund is 60% growth assets and 40% defensive assets. Half yearly income distributions.
structure: Managed Fund