Advance Wholesale Growth Multi-Blend Fund (ADV0085AU) Report & Performance

What is the Advance Wholesale Growth Multi-Blend Fund fund?

Advance Wholesale Growth Multi-Blend Fund aims to provide moderate to high returns (before fees and taxes) over the medium to long term, largely through capital growth by investing in a mix of growth and defensive assets. It is categorised as high risk.

  • The Advance Growth Multi-Blend Fund is ideal for investors who are seeking moderate to high returns, and are comfortable with a high level of risk.
  • The Fund invests in a diverse mix of assets with an emphasis (about 85%) on the growth oriented assets of Australian and international shares, and investment (about 15%) in the defensive assets of cash and fixed interest providing some income and stability of returns.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For Advance Wholesale Growth Multi-Blend Fund

Advance Wholesale Growth Multi-Blend Fund Fund Commentary August 31, 2023

In August, equities lost momentum and weakened (in local currency terms) after a strong rally over recent months. On a relative basis, US equities outperformed most major developed and emerging markets, while growth stocks generally outperformed value. Fixed income returns were broadly flat to slightly negative. The real asset sector saw the largest declines, with global REITs and infrastructure down markedly.

A combination of weaker forward-looking indicators, a modest uptick in inflation data, particularly in the US, and Fitch Ratings’ downgrade of its US credit rating at the start of August, impacted returns.

Composite purchasing manager indices (PMI) continue to soften across the globe with the US Composite PMI falling to a six-month low in August. A similar scenario for the Eurozone, China, UK and Australia, however, Japan bucked the trend with a marginally higher reading. Consumer confidence continues to weaken with increasing signs of consumer distress, such as rising credit card and auto-loan delinquencies. After a period of strength, global labour markets appear to be cooling off. US employment data saw a distinct weakening in August with a solid uptick in its unemployment rate (+0.3% to 3.8%).

READ HISTORICAL PERFORMANCE COMMENTARIES

Product Snapshot

  • Product Overview
  • Performance Review
  • Peer Comparison
  • Product Details

Product Overview

Fund Name APIR Code
? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.
Structure
?
Asset Class
? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.
Asset Category
? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.
Peer Benchmark Name
? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.
Broad Market Index
? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.
FUM
? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.
Management Fee
? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.
Performance Fee
? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.
Spread
? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
Advance Wholesale Growth Multi-Blend FundADV0085AUManaged FundsMulti-Asset81-100% Growth Assets - Multi-ManagerMulti-Asset - 81-100% Multi-Manager IndexMulti-Asset Aggressive Investor Index1.53 BN0.81%0.00%0.41%

Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Advance Wholesale Growth Multi-Blend Fund1.05%1.32%13.18%4.53%6.8%7.99%9.38%9.73%-5.14%-14.31%-38.67%

Peer Comparison

Fund Name Peer Index Name
? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.
12 Months Excess Return
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
Excess Return Annualised Since Inception
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
12 Months Alpha
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
Alpha Annualised Since Inception
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
12 Months Beta
? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Beta Annualised Since Inception
? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
12 Months Tracking Error
? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
Tracking Error Since Inception
? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
12 Months Correlation
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Correlation Since Inception
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Advance Wholesale Growth Multi-Blend FundMulti-Asset - 81-100% Multi-Manager Index-0.7%-0.65%NA%NA%NA%0.91.14%1.77%10.99

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
Advance Wholesale Growth Multi-Blend FundYes275 Kent Street Sydney, NSW 2000 Australia61-2-9259-3555https://www.bt.com.au/-

Product Due Diligence

What is Advance Wholesale Growth Multi-Blend Fund

Advance Wholesale Growth Multi-Blend Fund is an Managed Funds investment product that is benchmarked against Multi-Asset Aggressive Investor Index and sits inside the Multi-Asset - 81-100% Multi-Manager Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Advance Wholesale Growth Multi-Blend Fund has Assets Under Management of 1.53 BN with a management fee of 0.81%, a performance fee of 0.00% and a buy/sell spread fee of 0.41%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the Advance Wholesale Growth Multi-Blend Fund has returned 1.05% in the last month. The previous three years have returned 4.53% annualised and 9.73% each year since inception, which is when the Advance Wholesale Growth Multi-Blend Fund first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Advance Wholesale Growth Multi-Blend Fund first started, the Sharpe ratio is NA with an annualised volatility of 9.73%. The maximum drawdown of the investment product in the last 12 months is -5.14% and -38.67% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Advance Wholesale Growth Multi-Blend Fund has a 12-month excess return when compared to the Multi-Asset - 81-100% Multi-Manager Index of -0.7% and -0.65% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Advance Wholesale Growth Multi-Blend Fund has produced Alpha over the Multi-Asset - 81-100% Multi-Manager Index of NA% in the last 12 months and NA% since inception.

What are similar investment products?

For a full list of investment products in the Multi-Asset - 81-100% Multi-Manager Index category, you can click here for the Peer Investment Report.

What level of diversification will Advance Wholesale Growth Multi-Blend Fund provide?

Advance Wholesale Growth Multi-Blend Fund has a correlation coefficient of 0.99 and a beta of 0.9 when compared to the Multi-Asset - 81-100% Multi-Manager Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on Advance Wholesale Growth Multi-Blend Fund and its peer investments, you can click here for the Peer Investment Report.

How do I compare the Advance Wholesale Growth Multi-Blend Fund with the Multi-Asset Aggressive Investor Index?

For a full quantitative report on Advance Wholesale Growth Multi-Blend Fund compared to the Multi-Asset Aggressive Investor Index, you can click here.

Can I sort and compare the Advance Wholesale Growth Multi-Blend Fund to do my own analysis?

To sort and compare the Advance Wholesale Growth Multi-Blend Fund financial metrics, please refer to the table above.

Has the Advance Wholesale Growth Multi-Blend Fund been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in Advance Wholesale Growth Multi-Blend Fund?

If you or your self managed super fund would like to invest in the Advance Wholesale Growth Multi-Blend Fund please contact 275 Kent Street Sydney, NSW 2000 Australia via phone 61-2-9259-3555 or via email -.

How do I get in contact with the Advance Wholesale Growth Multi-Blend Fund?

If you would like to get in contact with the Advance Wholesale Growth Multi-Blend Fund manager, please call 61-2-9259-3555.

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the Advance Wholesale Growth Multi-Blend Fund. All data and commentary for this fund is provided free of charge for our readers general information.

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Historical Performance Commentary

Performance Commentary - July 31, 2023

In July, global equity markets maintained current upward momentum with most regions delivering solid, positive returns. On the other hand, fixed income performance was mixed, although in this “risk on” phase of the cycle, riskier parts of the sector fared better.

A combination of further declines in headline inflation, resilient economic data, particularly from the US, and market expectations that the current interest rate hiking cycle is nearing an end, led to positive investor sentiment throughout the month.

The advanced Q2 2023 US GDP growth figure was reported late month, coming in at 2.4% and surprising market economist estimates of 1.8%. On the flipside, UK and Eurozone growth was close to flat. Benefitting from the base effects of emerging from its extensive 2022 Covid lockdown, China’s GDP growth rate was measured at an annualised 6.3%, though a little below 7.3% expectations. Forward-looking composite purchasing manager indices (PMI) kept falling across the globe in July, with Japan the only region holding steady. PMIs for the services sector continue to outpace manufacturing though are easing towards 50, an important level that is considered the line between expansion and contraction.

Inflation data continued to decline, somewhat aided by the impact of last year’s energy price surge rolling off. US headline Consumer Price Index (CPI) fell to 3.0% p.a and is at the lowest level since early 2021. Similarly, CPI data across the UK, Eurozone and Australia, continues to show easing inflationary conditions, albeit at higher levels than the US. CPI has flatlined at near zero in China. Japan was the only major country that recorded a marginal increase in its inflation rate during Q2 2023. Central banks continued to err on the side of caution, increasing rates by 25bps in the US and Eurozone and 50bps in the UK, where inflation remains the highest among major developed economies. Central banks continued to emphasise a data-driven approach to future rate adjustments. In the US, which is furthest ahead in the inflation cycle, markets are now pricing in a greater than 50% chance that the Fed’s policy rate has peaked and interest rate cuts maybe forthcoming in 2024.

Over July, Hedged Developed Markets Overseas Shares delivered a 2.8% return. US indices were broadly in line with international developed markets, however, Emerging Markets (unhedged) outperformed with a positive 4.9% return. Value modestly outperformed growth over the period, although when looking on a year-to-date basis, mega-cap tech stocks still dominate returns and has led to increased market concentration within that segment of global markets. In the US, with roughly half of S&P500 companies having reported their Q2 2023 earnings, FactSet currently projects a 7% quarter over quarter (QoQ) earnings decline, which would be the softest quarterly outcome since the height of Covid’s impact. That said, to date the majority of companies have reported better than expected earnings results.

Hedged Overseas Government Bonds returned -0.4% over the month, as bond yields across most regions increased in July. Yields on both key long bonds in the US (10-year and 30-year) rose by approximately 15bps over the month. Outside the US, Japan’s 10-year yield rose by around 19bps, which is noteworthy following the Bank of Japan’s announcement that it will further increase the upper tolerance range for the 10-year yield (now 1.0% vs 0.5% previously). The UK was the only major economy where the 10-year yield fell, albeit modestly.

Australian Shares returned 2.9%, marginally outperforming their overseas counterparts in July. Financials (4.9%) and Energy (8.4%) were the strongest sectors of the market, while Healthcare (-1.5%), and Materials (1.4%) detracted.

Performance Commentary - June 30, 2023

In June, global equities, commodities and REITs posted strong returns, while bonds were generally flat with credit outperforming government bonds.

Markets continue to price in a soft landing as news flow remains focused on falling headline inflation, a potential end to the global interest rate hiking cycle and broad economic resilience, despite challenges for some sectors, such as regional banks.

Inflation continues to edge down in most major economies raising hopes that the hiking cycle is near an end in most regions. Although the Federal Reserve kept rates on hold for the first time in over a year, forward guidance was more hawkish than expected, which weakened the positive momentum that markets carried during the first half of the month. The ECB and RBA hiked rates by 25bps each, while the Bank of England was compelled to hike by 50bps, given stubbornly elevated levels of inflation in the UK. China continued to ease as its expected economic recovery has been underwhelming. Labour markets remain resilient, with unemployment only marginally rising in some regions, however, remaining close to multi-decade lows.

Volatility in rate markets fell in June, following the resolution of the debt ceiling talks, and the pause in monetary tightening in the US. Bond yields rose slightly in June, while credit spreads slightly decreased during the month.

Over June, Hedged Developed Markets Overseas Shares returned 5.6%, US stocks outperformed emerging markets and other international developed markets. Value and growth stocks delivered similar results in June, although year to date growth has significantly outperformed value. Japan contributed significantly to the outperformance of developed markets, gaining 7.5% in June, as the Bank of Japan continues to stimulate the economy. Emerging Markets Shares (UH) gained 0.9%, held back by weakness in China. Latin America was the standout in emerging markets as the recovery in commodities provides a tailwind for its equities.

Hedged Overseas Government Bonds returned -2.3% over the month, as bond yields generally increased during June. In the US, the 10-year bond yield rose by 16bps. In developed markets outside the US, 10-year yields fell by 3bps in Japan, while yields rose 20bps in the UK, and 13bps in the Eurozone.

US inflation expectations, as measured by the 10-year inflation breakeven rate, was unchanged and ended June at 2.2%.

Australian Shares returned 1.7%, underperforming their overseas counterparts in June. Materials (4.6%) and Financials (3.1%) were the strongest sectors, meanwhile Healthcare (-6.4%), and Communication Services (-1.0%) were the largest detractors.

Performance Commentary - May 31, 2023

In May, risk asset returns in developed markets were mostly negative, bonds and real assets also generally declined. Emerging market equities returns were marginally positive.

News flow during May focused predominantly on the debt ceiling deadline looming in early June. Overall, the market impact has been fairly limited, although ratings agencies have placed US credit on watch for potential downgrades. The challenges facing regional banks in the US continued to be a major topic in early-May with regulators brokering a deal for JP Morgan to purchase First Republic Bank. However, the sell-off in shares of other vulnerable banks continued along with sizable deposit outflows.

Economic data in general remained resilient. US unemployment rose slightly in May but remains at historically low levels, although, other indicators such as wage growth show that the labour market is gradually cooling. Forwardlooking purchasing manager indices remain in expansion territory across most major regions, with strength in services outweighing weakness in manufacturing. In spite of economic resilience, headline inflation continued to decline in most major economies with it falling to just under 5% in the US. Inflation in Japan rose to 3.5%, which is high by historical standards, but still lower than in other developed countries. In the UK and Eurozone, inflation remains more resilient, but also on a downward trajectory. Inflation in China remains low amid a slow and developing expected economic recovery.

Rate markets continue to grapple with the question of how long monetary policy will remain tight. The bond market is pricing in an initial rate cut toward the end of this year or early next year, but US Fed officials have generally cast doubt on that timeline. Credit spreads moved slightly higher during the month. Issuance is coming back after a slowdown earlier in the year when the first signs of distress emerged among US regional banks.

Over May, Hedged Developed Markets Overseas Shares returned -0.2%, equity volatility increased moderately over the month, with one spike early in the month due to renewed banking concerns and another spike later in the month amid debt ceiling negotiations. Earnings season for Q1 2023 is coming to an end, with a second consecutive quarterly decline. Equities markets have seen through weaker earnings so far as attested by strong year to date returns for Overseas Shares.

Over the month, it was notable that growth outperformed value by a large margin, in spite of rising yields. A couple of contributors included optimism over developments in A.I. favouring growth stocks, while more cyclical sectors that dominate value indices lagged. Emerging Markets Shares (UH) gained 0.4%, as poor performance in China offset positive performance in other major emerging economies.

Hedged Overseas Government Bonds returned -0.6% over the month as bond yields generally increased during May. In the US, the 10-year bond yield rose by 22bps, while the 30-year yield was up by 18bps. In developed markets outside the US, 10-year yields rose by 8bps for Japan and 46bps for the UK, while falling 3bps for the Eurozone. US inflation expectations, as measured by the 10-year inflation breakeven rate, fell 3bps to 2.2%.

Australian Shares returned -2.5%, underperforming their overseas counterparts in May. IT (10.4%) and Utilities (1.1%) were the strongest sectors, meanwhile Consumer Discretionary (-6.2%), and Consumer Staples (-4.5%) were the largest detractors.

Performance Commentary - April 30, 2023

Significant developments

• Australian March CPI rose 1.4% for the first quarter of 2023 taking the one year figure to 7.0%. The quarterly rise has been the lowest since December 2021.
• The Institute for Supply Management (ISM) Manufacturing Index recorded 47.1 in April, above consensus for 46.8 and above the 46.3 recorded in March. Of the five manufacturing industries that reported growth in March, the top performers were Printing & Related Support Activities and Apparel, Leather & Allied Products. There were 11 industries that recorded contraction in April compared to March. The ISM Services Index recorded 51.9 in April, above consensus for 51.8 and above the 51.2 recorded in March. Of the 14 services industries that reported growth, the top performers were Arts, Entertainment & Recreation and Other Services. There were three industries that reported a decrease in the month of April.
• US Non-Farm Payrolls increased by 253,000 in April, above the 236,000 increase recorded for March. The unemployment rate decreased to 3.4% over April, below expectations of 3.6%.
• US GDP first estimate for Q1 2023 is 1.1% quarter on quarter (QoQ) annualised, below expectations of 1.9%.
• The Caixin Manufacturing PMI in China recorded 49.5 in April, below expectations of 50, as business conditions moderated slightly over the month.
• The preliminary estimate of the European Core CPI recorded 5.6% over the year to April, in line with expectations.
• The Eurozone composite PMI increased to 54.4 in April, above expectations for 53.7.
• The first estimate recorded for Q1 2021 Eurozone seasonally adjusted GDP is 0.1% QoQ and 1.3% YoY.

Performance Commentary - February 28, 2023

The Advance Growth Multi-Blend Fund produced a negative return over the month of February. Global central banks committed to stay restrictive on monetary policy settings as service-related inflation remained elevated and labour market conditions remained tight. The US Federal Reserve increased US interest rates a further 25 basis points, lifting the Federal Funds Target Rate to a range between 4.50% and 4.75% in February. Both the European Central Bank and the Bank of England raised interest rates by 50 basis points to 2.50% and 4.0% respectively.

The Reserve Bank of Australia delivered another 25 basis points hike moving the overnight interest rate target to 3.35%. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned -2.5% over the month. International equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -1.6%. The Unhedged international equities outperformed hedged as the AUD depreciated against other major global currencies, returning 2.1% over the month. Emerging Market Equities, as measured by the MSCI Emerging Markets EM AUD Net Total Return Index, returned -2.3%. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned -0.4% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -3.6% over the month. Global yield curves shifted higher following the additional increase in interest rates. The US 10-year treasury yield moved 41bps higher to 3.92%, and the Australian 10-year government bond yield moved 30bps higher to 3.85% over the month.

Domestic fixed interest, as measured by the Bloomberg Ausbond Composite 0+ Yr Index, returned -1.3%. International fixed interest markets, as measured by the Bloomberg Barclays GlobalAggregate Total Return AUD Hedged index, returned -1.8%. Over the month both growth and defensive oriented portfolios returned negative results.

Performance Commentary - January 31, 2023

The Advance Growth Multi-Blend Fund produced a positive return over the month of January. Risk sentiment improved over the month as the market saw US headline CPI continue to trend down to 6.5% YoY in December. Core US CPI came in line with expectation at 0.3% MoM and 5.7% YoY. Investors speculated that the Fed would decelerate the pace of rate hikes and lift the target cash rate by 25bps in the February 1 FOMC meeting. Domestically, headline inflation in December increased to 7.8% YoY, above consensus of 7.6%.

The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 6.3% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 6.2%. Unhedged International Equities returned 3.0%, underperforming their hedged equivalent, as the AUD strengthened against its major global peers. Unhedged Emerging Market Equities returned 3.8% over the month, Chinese equities continued to rally, the offshore stocks outperformed as China’s reopening boosted up investors’ sentiment.

Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned 8.1% and global listed property as measured by the FTSE EPRA/ NAREIT Developed AUD Hedged Net Total Return Index, returned 8.0% over the month. Government bond yields shifted lower across most of the curve.

The Australian 10-year government bond yield moved 50bps lower to 3.55% and the US 10-year Treasury yield moved 37bps lower to 3.51% over the month. The domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 2.8% and the International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned 2.1%. Funds allocated to growth assets outperformed those with a higher allocation to defensive assets over the month.

Performance Commentary - December 31, 2022

The Advance Growth Multi-Blend Fund produced a negative return over the month of December. Following four consecutive hikes of 75bps this year, the US Federal Reserve decelerated the rate hike in December and lifted Federal Funds Target Rate by 50 basis points to a range between 4.25% and 4.50%. Despite another downside surprise on US November CPI, Fed officials reiterated the hawkish stance and indicated a higher terminal rate of above 5.00% over the next year. The European Central Bank delivered a 50 basis points hike and increased its deposit rate to 2.00% in line with market expectations. The Reserve Bank of Australia raised the cash rate target by 25 basis points to 3.10%. Risk sentiment was weak heading into the year end, with market concerns around recession risk heightened, signalled by contractionary Service PMI readings in the US. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned -3.3% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -5.2%. Unhedged international equities slightly underperformed hedged exposure due to a weaker USD, returning -5.5%.

Emerging Market Equities, as measured by the MSCI Emerging Markets EM AUD Net Total Return Index, returned -2.6%. Chinese offshore equities outperformed as the Chinese government shifts its focus away from Covid containment back towards economic growth. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned -4.0% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -3.8% over the month. Global yield curves shifted higher. The US 10-year treasury yield moved 27bps higher to 3.88%, and the Australian 10-year government bond yield moved 52bps higher to 4.05% over the month. Domestic fixed interest, as measured by the Bloomberg Ausbond Composite 0+ Yr Index, returned -2.1%. International fixed interest markets, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged index, returned -1.3%. Over the month both growth and defensive oriented portfolios had negative results.

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