Bentham Global Income Fund is actively managed and focused on generating stable investment income. The Fund provides diversified exposure to domestic and global credit markets.
The Bentham Global Income Fund had a total return (after fees) of -0.48% in the month of September, outperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 0.12%. On a before fees basis the fund returned -0.43% for the month, outperforming the benchmark by 0.17%.
Investment markets underperformed in September as a combination of resilient economic data (primarily in the US) and sticky inflation data prompted investors to price in a “higher cash rates for longer” scenario. Subsequently, bond yields generally increased (prices lower) and equity markets had negative returns. Interest rate sensitive sectors such as property and technology underperformed.
The top contributors to performance included Collateralised Loan Obligations (CLO), Asset Backed Securities (ABS) and Capital Securities; whilst the bottom performing contributors included Global Syndicated Loans, Investment Grade Credit and Global High Yield.
We remain cautious on the investment return outlook because the impact of the globally synchronised rapid interest rate hikes is yet to fully realised. We expect the negative impact of rate hikes to occur with a longer lag than previous rate hike cycles because the extraordinary government stimulus from Covid is still temporarily supporting growth. In addition, we expect tighter credit standards and increased capital costs for banks to weigh on economic growth. Higher rates are having a mixed impact on the household sector, leveraged households are spending less while household savers are benefitting from higher interest income.
What is Bentham Global Income Bentham Global Income is an Managed Funds investment product that is benchmarked against Global Aggregate Hdg Index and sits inside the Fixed Income - Multi-Strat Income 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 Bentham Global Income has Assets Under Management of 2.04 BN with a management fee of 0.72%, a performance fee of 0.00% and a buy/sell spread fee of 0.56%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the Bentham Global Income has returned 4.26% in the last month. The previous three years have returned 3.94% annualised and 7.49% each year since inception, which is when the Bentham Global Income 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 Bentham Global Income first started, the Sharpe ratio is 0.43 with an annualised volatility of 7.49%. The maximum drawdown of the investment product in the last 12 months is -3.95% and -34.89% 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 Bentham Global Income has a 12-month excess return when compared to the Fixed Income - Multi-Strat Income Index of 2.55% and 1.49% 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. Bentham Global Income has produced Alpha over the Fixed Income - Multi-Strat Income Index of 0.19% in the last 12 months and 0.11% since inception.
What are similar investment products? For a full list of investment products in the Fixed Income - Multi-Strat Income Index category, you can click here for the Peer Investment Report.
What level of diversification will Bentham Global Income provide? Bentham Global Income has a correlation coefficient of 0.91 and a beta of 1.26 when compared to the Fixed Income - Multi-Strat Income 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 Bentham Global Income and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Bentham Global Income with the Global Aggregate Hdg Index? For a full quantitative report on Bentham Global Income compared to the Global Aggregate Hdg Index, you can click here.
Can I sort and compare the Bentham Global Income to do my own analysis? To sort and compare the Bentham Global Income financial metrics, please refer to the table above.
Has the Bentham Global Income 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 Bentham Global Income? If you or your self managed super fund would like to invest in the Bentham Global Income please contact Level 2, 5 Martin Place, Sydney NSW 2000 via phone +61 133 566 or via email info@challenger.com.au.
How do I get in contact with the Bentham Global Income? If you would like to get in contact with the Bentham Global Income manager, please call +61 133 566.
Comments from SMSF Mates SMSF Mate does not receive commissions or kickbacks from the Bentham Global Income. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 The Bentham Global Income Fund had a total return (after fees) of 0.77% in the month of August, outperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 0.21%. On a before fees basis the fund returned 0.83% for the month, outperforming the benchmark by 0.28%.
Investment market returns were mixed in the month of August amid concerns over renewed weakness in the Chinese real estate sector and hawkish comments from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium. Equity markets traded lower while Government bond markets and credit markets outperformed.
The top contributors to performance included Global Syndicated Loans, Collateralised Loan Obligations (CLO) and Capital Securities; whilst the bottom performing contributors included Asset Backed Securities (ABS), Global Hybrids and Bond.
We remain cautious on the investment outlook because the impact of the globally synchronised rapid interest rate hikes is yet to fully realised. We expect the negative impact of rate hikes to occur with a longer lag than previous rate hike cycles because the extraordinary stimulus from Covid is still temporarily supporting growth. In addition, we expect tighter credit standards and increased capital costs for banks to weigh on economic growth. Higher rates are having a mixed impact on the household sector, leveraged households are spending less while household savers are benefitting from higher interest income.
In fixed income markets we are anticipating a short-term risk of increased credit spreads. However, elevated credit spreads in some credit sectors provide a reasonable income buffer against any increases in credit spreads. Government bond yields may be close to their cyclical peak and beginning to trend lower as the cash rate hiking cycle appears to be coming to an end.
Performance Commentary - July 31, 2023 The Bentham Global Income Fund had a total return (after fees) of 1.03% in the month of July, outperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 0.58%. On a before fees basis the fund returned 1.09% for the month, outperforming the benchmark by 0.64%.
Investment markets were generally higher over the month with improving inflation data and resilient economic growth improving the odds of a soft landing in the US. Both the US Federal Reserve (Fed) and the European Central Bank (ECB) raised rates by 0.25% in line with expectations with forward-looking indicators suggesting rates are now close to their peak for the cycle. Both equity and credit markets were higher with emerging markets outperforming.
The top contributors to performance included Capital Securities, Global Syndicated Loans and Investment Grade Credit; whilst the bottom performing contributors included Bond, Residential Mortgage Backed Securities (RMBS) and Asset Backed Securities (ABS).
We remain cautious on the outlook because we believe the impacts of the rapid increase in interest rates will occur with longer and variable lags. Higher rates have not fully impacted the real economy. In addition, we expect tightened credit standards and increased capital costs for banks will weigh on the economy. We anticipate the risk that credit spreads may increase, albeit already from their currently elevated levels, and government bond yields may benefit (fall) as inflation continues to fall from elevated levels. In our multi-sector credit portfolios, we have more interest rate duration and still maintain a defensive credit exposure positioning.
Interest rates and bonds offer their best value in the last 23 years relative to equities. We are less worried about the last one or two interest rate increase and more worried about the impact on the economy of the last 20 rate rises.
Performance Commentary - June 30, 2023 The Bentham Global Income Fund had a total return (after fees) of -2.11% in the month of June, underperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 1.28%. On a before fees basis the fund returned -2.08% for the month, underperforming the benchmark by 1.25%.
Investment markets were mixed in June amid persistent inflation and a more hawkish narrative from Central Banks. Equity markets trended higher (led by the AI tech sector); credit spreads were flat to tighter while Government bond markets were lower on higher interest rates. Australia’s yield curve inverted for the first time since the GFC, mirroring the US and New Zealand as investors price in a difficult 2024 for the local economy.
The top contributors to performance included Asset Backed Securities (ABS), Global Syndicated Loans and Collateralised Loan Obligations (CLO); whilst the bottom performing contributors included Capital Securities, Investment Grade Credit and Global Hybrids.
We remain cautious on the outlook because we believe the impacts of the rapid increase in interest rates will occur with longer and variable lags. Higher rates have not fully impacted the real economy. In addition, we expect tightened credit standards and increased capital costs for banks will weigh on the economy. We anticipate the risk that credit spreads may increase, albeit already from their currently elevated levels, and government bond yields may benefit (fall) as inflation continues to fall from elevated levels. In our multi-sector credit portfolios, we have more interest rate duration and still maintain a defensive credit exposure positioning.
Interest rates and bonds offer their best value in the last 23 years relative to equities. We are less worried about the last one or two interest rate increase and more worried about the impact on the economy of the last 20 rate rises. We have dry powder to put to work when market opportunities present themselves. The deleveraging or right sizing of debt will eventually be more positive for credit markets than equities.
Performance Commentary - May 31, 2023 The Bentham Global Income Fund had a total return (after fees) of -1.72% in the month of May, underperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 1.26%. On a before fees basis the fund returned -1.65% for the month, underperforming the benchmark by 1.20%.
Investment markets were mixed in May amid varied economic signals, sticky inflation data and a more hawkish tone from major central banks. Equities were flat, with broad based weakness offset by strength in the tech sector and positive sentiment relating to AI. Bond and credit markets were generally weaker.
The top contributors to performance included Collateralised Loan Obligations (CLO), Residential Mortgage Backed Securities (RMBS) and Bond; whilst the bottom performing contributors included Asset Backed Securities (ABS), Global Syndicated Loans and Investment Grade Credit.
We remain cautious on the outlook because we believe the impacts of the rapid increase in interest rates will occur with longer and variable lags. Higher rates have not fully impacted the real economy. In addition, we expect tightened credit standards and increased capital costs for banks will weigh on the economy. We anticipate the risk that credit spreads may increase, albeit already from their currently elevated levels, and government bond yields may benefit as inflation continues to fall from elevated levels. In our multi-sector credit portfolios, we have increased the interest rate duration and still maintain a defensive credit exposure positioning.
Market concerns of potential economic weakness have seen credit markets weaken over the past year, with credit spreads increasing significantly. The higher credit spreads are now well above 10-year averages and currently provide an additional running yield buffer against further market weakness, and we believe that the higher overall yield provides for a favourable income profile.
Performance Commentary - April 30, 2023 The Bentham Global Income Fund had a total return (after fees) of 0.91% in the month of April, outperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 0.65%. On a before fees basis the fund returned 0.99% for the month, outperforming the benchmark by 0.74%.
The top contributors to performance included Global Syndicated Loans, Capital Securities and Collateralised Loan Obligations (CLO); whilst the bottom performing contributors included Equity Securities, Bond and Residential Mortgage Backed Securities (RMBS).
Investment markets were stronger in April, boosted by growing optimism that Central Banks are near the end of the rate hike cycle and inflation has peaked. Fixed Income and credit markets registered gains, while the banking sector remained volatile, US regional banks specifically.
Economic data remained resilient in the face of growing pressures, while falling energy prices and signs of moderating wage growth eased concerns over inflation. Nonetheless, the collapse of First Republic and ultimate sale to JP Morgan showed the fallout of Central Bank tightening is continuing to have consequences and the long and variable lag of the fast-paced rake hikes has more the play out.
Performance Commentary - March 31, 2023 The Bentham Global Income Fund had a total return (after fees) of 0.50% in the month of March, underperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 1.22%. On a before fees basis the fund returned 0.57% for the month, underperforming the benchmark by 1.15%.
Investment markets had mixed returns in March as government bonds markets and the broader equity market outperformed, while bank shares and some segments of credit markets underperformed.
The top contributors to performance included Investment Grade Credit, Global High Yield and Asset Backed Securities (ABS); whilst the bottom performing contributors included Capital Securities, Global Syndicated Loans and Global Hybrids.
We remain cautious on the outlook because the rapid increase in interest rates will have a long and variable lag effect on the economy. Higher rates are still to fully impact the real economy. In addition, tightened credit standards and increased capital for banks will weight on the economy. We anticipate the risk that credit spreads may increase, albeit already from their currently elevated levels, and government bond yields to continue to benefit as inflation begins to moderate. In our multi-sector credit portfolios, we have increased the interest rate duration and still maintain a defensive credit exposure positioning.
Market concerns of potential economic weakness have seen credit markets weaken over the past year, with credit spreads increasing significantly. The higher credit spreads are now well above 10-year averages and currently provide an additional running yield buffer against further market weakness, and we believe that the higher overall yield provides for a favourable income profile.
Performance Commentary - February 28, 2023 The Bentham Global Income Fund had a total return (after fees) of -1.46% in the month of February, underperforming the benchmark (50% Bloomberg AusBond Bank Bill Index, 50% Bloomberg AusBond Composite Index) by 0.92%. On a before fees basis the fund returned -1.42% for the month, underperforming the benchmark by 0.88%.
After a strong January, investment markets were weaker in February as investors reassessed the outlook for interest rates with Central Banks suggesting the peak in rates may be some way off. The Federal Reserve, European Central Bank and Bank of England all raised rates during the month, as did the RBA which hiked by another 0.25% to 3.60%.
The top contributors to performance included Collateralised Loan Obligations (CLO), Residential Mortgage Backed Securities (RMBS) and Bond; whilst the bottom performing contributors included Asset Backed Securities (ABS), Capital Securities and Investment Grade Credit.
We remain cautious because the long and variable lagged impact of much higher interest rate which are still to impact the real economy at which point, we anticipate the risk that credit spreads may increase, albeit already from their currently elevated levels, and government bond yields to benefit. In our multi-sector credit portfolios, we have increased the interest rate duration and still maintain a defensive credit exposure positioning.
Market concerns of potential economic weakness have seen credit markets weaken over the past year, with credit spreads increasing significantly as traded credit markets have actively repriced. The higher implied credit spreads are now well above 10-year averages and currently provide an additional running yield buffer against further market weakness, and we believe that the higher overall yield provides for a favourable income profile.
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