BT Index Defensive Fund (WFS0588AU) Report & Performance

What is the BT Index Defensive Fund fund?

BT Index Defensive Fund aims to provide investors with predominantly income and some growth returns, with a low probability of loss over the short term which tracks the overall return of a diversified portfolio of underlying investments. The Fund invests in a diverse mix of assets with the majority in the defensive assets of cash and fixed interest (around 70%) and a modest investment in growth assets such as shares and property (around 30%). The Fund’s exposure to these asset classes will be obtained primarily by investing directly into our sector specific funds. The Fund may also hold assets directly including derivatives, currency and other unit trusts.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For BT Index Defensive Fund

BT Index Defensive Fund Fund Commentary November 30, 2023

Share markets continued their upward momentum over the month as investors weighed in on the debate over ‘are we at peak rates and peak inflation yet?’. With support from strong employment data and a softening view on a global recession coming sooner than later, headwinds of house price falls, consumer sentiment waning, a cautious business community, and ongoing geopolitical forces centring around Europe and Asia, all seemed to take a back seat to investor concerns. As we look ahead to December, all eyes will be on the sustainability of this back-to-back monthly rally. Markets will be directing attention to data released for US payrolls, job openings, consumer spending, and the upcoming Fed meeting mid-month. The Consumer Sentiment Index fell sharply to 78.0 in November from 83.7 in October. The read is now below the 79.0 recorded during the GFC and near the lows recorded during the deep recession of the early 1990s (64.6) and the initial phase of COVID (76.5). Interestingly, the divergence between consumer confidence and consumer spending is still quite wide. While consumer sentiment has been deeply pessimistic for most of this year, retail spending has remained resilient, although is now showing subtle signs of slowing.

The source of this resilience could include the strength of the labour market, savings accumulated during the pandemic, or a larger proportion of households with fixed-rate mortgages – who haven’t yet felt the pinch of higher rates. Either way, it ironically appears that consumers are socialising in busy retail and hospitality venues talking about how bad the economy is. It should be remembered that monetary policy acts with long and variable lags. For example, it takes around two to three months for a cash rate increase to be reflected in higher minimum repayments for variable rate mortgage holders. Around 35% of Australian households are currently on fixed-rate mortgages and won’t face higher repayments until their fixed-rate term expires, and the RBA expects around 60% of these fixed-rate mortgages to roll into higher variable rates by the end of 2023.

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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.
BT Index Defensive FundWFS0588AUManaged FundsMulti-Asset21-40% Growth Assets - Low-Cost DiversifiedMulti-Asset - 21-40% Low-Cost IndexMulti-Asset Moderate Investor Index196.59 M0.34%0.00%0.14%

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.
BT Index Defensive Fund3.43%5.22%7.57%1.44%3.15%6.33%6.25%5.32%-3.65%-10.3%-10.3%

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.
BT Index Defensive FundMulti-Asset - 21-40% Low-Cost Index-0.35%-0.4%-0.07%-0.05%-0.05%1.121.07%0.8%0.990.99

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
BT Index Defensive FundYes275 Kent Street Sydney, NSW 2000 Australia61-2-9259-3555https://www.bt.com.au/-

Product Due Diligence

What is BT Index Defensive Fund

BT Index Defensive Fund is an Managed Funds investment product that is benchmarked against Multi-Asset Moderate Investor Index and sits inside the Multi-Asset - 21-40% Low-Cost 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 BT Index Defensive Fund has Assets Under Management of 196.59 M with a management fee of 0.34%, a performance fee of 0.00% and a buy/sell spread fee of 0.14%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the BT Index Defensive Fund has returned 3.43% in the last month. The previous three years have returned 1.44% annualised and 5.32% each year since inception, which is when the BT Index Defensive 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 BT Index Defensive Fund first started, the Sharpe ratio is 0.35 with an annualised volatility of 5.32%. The maximum drawdown of the investment product in the last 12 months is -3.65% and -10.3% 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 BT Index Defensive Fund has a 12-month excess return when compared to the Multi-Asset - 21-40% Low-Cost Index of -0.35% and -0.4% 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. BT Index Defensive Fund has produced Alpha over the Multi-Asset - 21-40% Low-Cost Index of -0.07% in the last 12 months and -0.05% since inception.

What are similar investment products?

For a full list of investment products in the Multi-Asset - 21-40% Low-Cost Index category, you can click here for the Peer Investment Report.

What level of diversification will BT Index Defensive Fund provide?

BT Index Defensive Fund has a correlation coefficient of 0.99 and a beta of 1.12 when compared to the Multi-Asset - 21-40% Low-Cost 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 BT Index Defensive Fund and its peer investments, you can click here for the Peer Investment Report.

How do I compare the BT Index Defensive Fund with the Multi-Asset Moderate Investor Index?

For a full quantitative report on BT Index Defensive Fund compared to the Multi-Asset Moderate Investor Index, you can click here.

Can I sort and compare the BT Index Defensive Fund to do my own analysis?

To sort and compare the BT Index Defensive Fund financial metrics, please refer to the table above.

Has the BT Index Defensive 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 BT Index Defensive Fund?

If you or your self managed super fund would like to invest in the BT Index Defensive 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 BT Index Defensive Fund?

If you would like to get in contact with the BT Index Defensive Fund manager, please call 61-2-9259-3555.

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the BT Index Defensive 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 - February 28, 2023

After January’s strong start to 2023, February shifted into reverse gear with a softer performance across global markets. Central banks continued hiking interest rates despite global inflation prints beginning to show signs of abating. Softening in what has been exceedingly strong labour markets, as rate hikes weigh on confidence and household spending, is a clear indicator. That said, we are not out of the woods yet, as we believe there remains a long path to controlling inflation. As mentioned above, the RBA kicked off 2023 with another rate hike of 25bps, taking the cash rate to 3.35%. The policy statement took a more hawkish tone than December’s, with stronger language around its resolve to bring inflation back to target. The final paragraph of the statement: ‘The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary’. This statement implies that there are going to be at least two more hikes in this cycle. The Statement on Monetary Policy (SoMP) includes updated forecasts for the economy, in which the outlook for economic activity remains broadly unchanged. The RBA is still expecting a soft landing, with the unemployment rate to increase but remain well below where it sat pre-pandemic. What changed was the outlook for underlying inflation (the inflation measure which dampens the impact of volatile items) and wages growth. The RBA is now expecting annual wages growth to be around 0.5% higher in the December quarter of 2022 and the June quarter of 2023. This is feeding into higher underlying inflation expectations, which is now approximately 0.75% higher for the June quarter 2023. By 2025, underlying inflation and wages growth are broadly in line with what was expected in November. These forecasts are based on the cash rate reaching 3.75% in mid-2023, up from the 3.5% expected back in November. In other words, the RBA believes the economy can withstand a cash rate of 3.75% without slowing down too sharply

Performance Commentary - January 31, 2023

Consumer sentiment started 2023 on a positive note, rising to 84.3 in January, an increase of 5.0% in the month. Sentiment is at its highest level since September, though still deeply pessimistic as the mood among consumers is downbeat among higher interest rates and elevated cost-ofliving pressures. Encouragingly, consumers are slowly becoming less pessimistic about the future.

The weak consumer sentiment is expected to flow through to a slowdown in household spending. However, this is taking time as spending has been supported by robust household savings, an unleashing of pent-up demand, and a tight labour market. These factors are expected to fade as we move through 2023. The December quarter’s headline inflation read came in at 1.9%, to be 7.8% in annual terms.

This annual rate is the highest in nearly 33 years, though was under the RBA’s forecast of 8%. Goods inflation is showing some signs of easing, though this may be happening too slowly for the RBA’s liking. More troubling for the RBA is that price pressures have broadened and inflation in the services industry has accelerated to 5.5% p.a. – its highest rate since 2008. This was driven by the hospitality industry with consumers seemingly blasé by the 10.9% quarterly increase in the price of holiday travel and accommodation.

Performance Commentary - December 31, 2022

2022 was a year unlike any other. It was initially predicted to be one of repair and recovery following the global pandemic, though it was found to be rather rife with political uncertainty, market volatility, interest rates, supply chain disruptions, and of course, resultant high inflation. As we move into 2023, indicators are that inflation may have peaked, with language from central banks now debating whether they will pivot or pause their rate hike strategies.

Australia
There is growing evidence the economy is starting to slow as the weight of this year’s rate hikes take a toll. Data released in December indicated retail spending fell in October for the first time this year as consumers remain deeply pessimistic about the economic outlook. Moreover, November’s inflation numbers unexpectedly showed an easing in price pressures. This data may be an early sign that inflation has started to roll over and that it will peak in the current quarter, as expected by policymakers. However, one month’s number is not enough to constitute a trend. Also, the monthly inflation measure is not as important as the quarterly inflation measure that the RBA focusses on, although it has been providing reliable guidance. Encouragingly, China has also further relaxed COVID-19 restrictions, supporting a further improvement in globalsupply chain disruptions. Furthermore, the unemployment rate fell to its lowest in nearly 50 years and the wage price index reveals an acceleration is underway in wages growth.

Performance Commentary - October 31, 2022

Markets rallied over October against a strong headwind of a tighter US rate rise trajectory, mixed economic data across the globe, a new UK prime minister and still no let-up of the Chinese leadership’s zero-COVID policy. Concerns remain over energy supply as Europe moves towards the winter months and whilst on the topic of Europe, the impacts of their central banks’ October rate rise to combat record levels of inflation being reported in that region. As we look ahead, global recession remains a front-of-mind topic of discussion.

Australia
Producer price inflation continued to increase through the September quarter. The Producer Prices Index (PPI), which measures the average change over time in the selling prices received by domestic producers for their output, accelerated 1.9% over the quarter. This brought the index’s rise to 5.6% over the year to September. This suggests that inflationary pressures are still building in the pipeline. Headline inflation continued to accelerate rapidly in the September quarter, surging to 7.3% – the highest annual pace in over 32 years.

While global supply-chain disruptions and energy price shocks are major drivers of inflation, pressures continue to spread across a range of spending categories. Strong domestic demand is marking up against constrained supply, leading to further increases in prices. Of all the spending categories and sub-categories measured by the Bureau of Statistics, over 85% grew at an annual pace of more than 2.5% (the mid-point of the RBA’s 2-3% target band). The last time more than 85% of categories and sub-categories grew at an annual pace of over 2.5% was in 1990.

Performance Commentary - September 30, 2022

Markets continued to fall over September as rate rises were delivered over the month. The expectations of rate hikes in the near future also sparked the acceptance that a global recession has a high probability of occurring, as the fight to temper inflation continues. With the UK in a state of economic flux, and no end in sight with the war in the Ukraine, there remains a deep uncertainty as to what lies ahead.

Australia
In early September the Federal Government’s Jobs and Skills Summit took place, which included two days of speeches and discussions with industry, government, unions, and business leaders.

The Government announced 36 outcomes and initiatives that would be implemented following the Summit. These are grouped into five key themes and categories: – A better skilled, better trained workforce.
– Addressing skills shortages and strengthening the migration system.
– Boosting job security and wages, and creating safe, fair and productive workplaces.
– Promoting equal opportunities and reducing barries to employment.
– Maximising jobs and opportunities in our industries and communities.

One of the main policies coming out of the summit included changes to the migration program to accelerate and increase the number of people coming to Australia to help employers fill the record number of job vacancies across the economy.

Performance Commentary - August 31, 2022

The bullish sentiment in July that saw a strong market recovery was tempered over August as a more hawkish tone from Central Banks pushed most markets into negative territory. While the argument over whether we have hit ‘peak inflation’ continues, we saw US inflation moderate, however the Eurozone’s continues to rise. Political uncertainty continued in the UK, where looking ahead, a fourth Prime Minister in six years was elected. This is in the face of an economy that has now slipped behind India in the World Bank’s latest global GDP rankings.

Australia
Over August, wage pressures across the economy have been growing steadily. Survey measures suggest that total labour costs (including employment growth) are increasing at the fastest rate on record. Reports of oversized wage increases are common, particularly in industries with strong labour demand and labour supply issues. This includes IT, professional services, construction, and parts of the services sector that previously had a heavy reliance on international students and migrants. These wage pressures are expected to flow through into the Wage Price Index (WPI) over time. Growth in the WPI had only returned to around pre-pandemic levels in the March quarter. For the June quarter, we predict that wages grew by 0.9%, to be 2.9% higher over the year. If our forecasts prove to be correct, this will result in the strongest quarterly wages growth since mid-2012 and the strongest annual growth since mid-2013.

Performance Commentary - July 31, 2022

After a benign June month for the world’s share markets, July saw a bounce back driven by easing fears of central banks’ over-tightening of monetary policy, stronger consensus on peak inflation and a solid Q2 reporting season out of the US, which all helped shape a good month for markets in the face of still evolving geopolitical tensions.

July saw the Westpac Melbourne Institute Index of Consumer Sentiment fall 3.0% to 83.8 from 86.4 in June, marking the seventh consecutive monthly fall. The survey, covering 1200 respondents, was conducted over the four days from July 4th to July 7th. Last month we noted the Index was already around levels that, since the beginning of the survey in 1974, had only been seen during periods of major disruption in the Australian economy, including the COVID pandemic, the Global Financial Crisis, the recession in the early 1990s, the slowdown in the mid–1980s, and the recession of the early 1980s. This fall in July means that the pace of the sentiment deterioration is now also in line with these infamous periods. The Index has now fallen 19.7% since December 2021, a precipitous tumble comparable to the two–month plunge during COVID (–20.8%), the six– monthly declines seen heading into the Global Financial Crisis (–29.7%), the early 1990s recession (–20.5%), the mid–1980s downturn (–23.8%), and early 1980s recession (–18.8%).

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