BT Wholesale Multi-manager Growth Fund (BTA0223AU) Report & Performance

What is the BT Wholesale Multi-manager Growth Fund fund?

BT Wholesale Multi-manager Growth Fund aims provide high total returns (before fees and taxes) over the long term through capital growth by investing predominantly in growth assets. The Multi-manager funds allow you to select a single investment option that diversifies across asset classes, investment managers and investment management styles. This diversification helps reduce overall risk and aims to improve consistency of returns by minimising the impact on overall performance resulting from any one style, asset class or manager.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For BT Wholesale Multi-manager Growth Fund

BT Wholesale Multi-manager Growth Fund Fund Commentary November 30, 2023

The BT Wholesale Multi-manager Growth Fund produced a positive return over the month of November. A lower-than-expected October US inflation print triggered a rally in stock markets as interest rate expectations shifted lower. This was despite the US Federal Reserve hiking its cash rate target by another 75bps to 3.75-4.00% and its hawkish messaging suggesting a higher terminal rate of above 5%.

The US mid-term election concluded with Republicans taking control of the House of Representatives and the Democrats retaining control of the Senate. Domestically, the Reserve Bank of Australia delivered another 25bps rate hike, the first November rate rise since 2010. The Australian Bureau of Statistics released a new monthly CPI indicator, showing a headline inflation of 6.9% year-on-year to October, below market expectations. The domestic equity market, as represented by the S&P/ ASX 300 Accumulation Index, returned 6.5% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 5.4%.

Unhedged international equities returned 2.0%, underperforming hedged exposure as the AUD appreciated against its major global peers. Chinese offshore equities had a sharp rebound with the Hang Seng index rallying 26.6% over the month. Market sentiment improved with Chinese authorities recalibrating covid restriction rules and laying out measures to address the liquidity crunch in the property sector. As a result, emerging market equities outperformed, returning 9.6% in AUD terms. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned 5.8% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned 5.0% over the month.

The Australian 10-year government bond yield moved 23bps lower to 3.53% and the US 10-year Treasury yield moved 44bps lower to 3.61% over the month. Both Investment Grade and High Yield credit spreads narrowed. The domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 1.5% and the International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned 2.4%. Funds allocated to growth assets outperformed those with a higher allocation to defensive assets over the month

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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 Wholesale Multi-manager Growth FundBTA0223AUManaged FundsMulti-Asset81-100% Growth Assets - Multi-ManagerMulti-Asset - 81-100% Multi-Manager IndexMulti-Asset Aggressive Investor Index38.21 M0.94%0.00%0.29%

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 Wholesale Multi-manager Growth Fund-2.31%-5.67%5.18%6.35%5.44%9.23%10.75%9.9%-5.67%-15.32%-42.66%

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 Wholesale Multi-manager Growth FundMulti-Asset - 81-100% Multi-Manager Index-0.14%-0.72%-0.01%-0.04%-0.04%1.020.67%1.57%10.99

Product Details

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

Product Due Diligence

What is BT Wholesale Multi-manager Growth Fund

BT Wholesale Multi-manager Growth 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 BT Wholesale Multi-manager Growth Fund has Assets Under Management of 38.21 M with a management fee of 0.94%, a performance fee of 0.00% and a buy/sell spread fee of 0.29%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the BT Wholesale Multi-manager Growth Fund has returned -2.31% in the last month. The previous three years have returned 6.35% annualised and 9.9% each year since inception, which is when the BT Wholesale Multi-manager Growth 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 Wholesale Multi-manager Growth Fund first started, the Sharpe ratio is 0.25 with an annualised volatility of 9.9%. The maximum drawdown of the investment product in the last 12 months is -5.67% and -42.66% 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 Wholesale Multi-manager Growth Fund has a 12-month excess return when compared to the Multi-Asset - 81-100% Multi-Manager Index of -0.14% and -0.72% 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 Wholesale Multi-manager Growth Fund has produced Alpha over the Multi-Asset - 81-100% Multi-Manager Index of -0.01% in the last 12 months and -0.04% 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 BT Wholesale Multi-manager Growth Fund provide?

BT Wholesale Multi-manager Growth Fund has a correlation coefficient of 0.99 and a beta of 1.02 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 BT Wholesale Multi-manager Growth Fund and its peer investments, you can click here for the Peer Investment Report.

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

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

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

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

Has the BT Wholesale Multi-manager Growth 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 Wholesale Multi-manager Growth Fund?

If you or your self managed super fund would like to invest in the BT Wholesale Multi-manager Growth 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 Wholesale Multi-manager Growth Fund?

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

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the BT Wholesale Multi-manager Growth 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 - January 31, 2023

The BT Wholesale Multi-manager Growth 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 BT Wholesale Multi-manager Growth 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.

Performance Commentary - October 31, 2022

The BT Wholesale Multi-manager Growth Fund produced a positive return over the month of October. Risk sentiment improved over the month despite another higher-than-expected increase in US Core CPI of 6.6% YoY, and a Headline CPI increase of 8.2% YoY in September. Investors speculated a dovish pivot from the Fed post the November and December FOMC, where rate increases are expected to be kept at the current pace. Domestically, the Reserve Bank of Australia has slowed the pace of rate hikes and raised the cash rate target by 25 basis points, meanwhile headline inflation was reported at 7.3% YoY in the September quarter, expecting to peak in the December quarter of 2022.

The domestic equity market, as represented by the S&P/ ASX 300 Accumulation Index, returned 6.0% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 7.2%. Unhedged International Equities returned 7.8%, outperforming hedged exposure as the AUD slightly weakened against its major global peers. Emerging Market Equities returned -2.6% over the month, China has significantly underperformed, with investors disappointed by its unwavering insistence on COVID-zero measures post its 20th National Congress. Listed properties partially recovered from the previous drawdown. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned 9.9% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned 3.1% over the month.

Bond market volatility elevated to historical level over the month as the global bond market saw liquidity pressures, followed by immediate government interventions. The Australian 10-year government bond yield moved 13bps lower to 3.76% while the US 10-year Treasury yield moved 22bps higher to 4.05% over the month. The domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 0.9% and the International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -0.4%. Funds allocated to growth assets outperformed those with a higher allocation to defensive assets over the month.

Performance Commentary - September 30, 2022

The BT Wholesale Multi-manager Growth Fund produced a negative return over the month of September.

Higher-than-expected US inflation has spurred a risk asset sell-off as the market recalibrated to higher interest rate expectations of 4% and above in the US by the end of this year with less likelihood of rate cuts in 2023. The Federal Reserve delivered its third consecutive 75 basis points rate hike and moved its target rate to a range of 3.00%-3.25%, the highest level since 2008. Energy concerns continued to plague Europe, German CPI was reported at 10.9% year on year and pressures remained for European central banks to turn more hawkish. Financial markets turmoil was further fuelled by the UK government’s fiscal plan and its ramification on UK gilts market.

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 -8.9%. Unhedged international equities returned -3.2%, outperforming hedged exposure as a result of a stronger USD. Emerging Market Equities, as measured by the MSCI Emerging Markets EM AUD Net Total Return Index, returned -5.9%.

Listed properties sold off as higher interest rates weighed on valuations. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned -13.6% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -11.8% over the month.

Fear of contagion elevated bond market volatility. UK 10yr gilt yields moved 129bps up to 4.09%, joined by a 57bps increase in German 10yr yield and 62bps increase in Italian 10yr bond yield. The US 10-year Treasury yield also moved 64bps higher to 3.83% over the month and the Australian 10-year government bond yield moved 29bps higher to 3.89%. Credit spreads also widened. As a result, the international fixed interest market, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -3.5%; and the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned -1.4%.

Over the month both growth and defensive oriented portfolios had negative results.

Performance Commentary - August 31, 2022

The BT Wholesale Multi-manager Growth Fund produced a negative return over the month of August.

Both the US Federal Reserve and the European Central Bank (ECB) continued their hawkish rhetoric and remained committed to aggressive interest rate hikes. Europe continued to suffer from high energy prices due to the suspension of Russian crude oil and gas supply. The German Producer Prices (PPI) reported its highest-onrecord increase in August and the energy supply problem was further exacerbated by the record-breaking droughts from prolonged heatwaves across Europe. Geopolitical risk in the Asia-Pacific region elevated as China carried out military exercises surrounding Taiwan following the US House of Representative Nancy Pelosi’s visit to Taiwan. Led by the strong Energy and Materials sector returns, the domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 1.2% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -3.6%.

The USD further strengthened as the safe haven currency, unhedged international equities outperformed hedged exposures, returning -2.5%. Unhedged Emerging Market equities, as represented by the MSCI Emerging Markets Net Total Return AUD Index, returned 2.2% over the month. Listed property valuations continued to face a headwind from rising interest rates. Domestic listed property, as measured by the S&P/ASX 300 A-REIT Index, returned -3.6% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -5.7% over the month. Global yield curves shifted higher because of higher cash rates.

The Australian 10-year government bond yield moved 54bps higher to 3.60%, the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned -2.5%. The US 10-year Treasury yield moved 54bps higher to 3.20% over the month, International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -2.7%. Funds with allocations to both growth and defensive assets had negative results over the month.

Performance Commentary - July 31, 2022

The BT Wholesale Multi-manager Growth Fund produced a positive return over the month of July. Risk sentiment improved despite another uptick in the US headline CPI to 9.1% YoY in July, and a second consecutive 75bps interest rate hike from the US Federal Reserve. Investors speculated a peak in headline inflation and a less hawkish policy setting going forward, following a period of mixed economic signals and the US entering a technical recession over the first half of 2022.

Domestically, the Reserve Bank of Australia continued to raise interest rates by 50bps to help contain higher inflation, currently reported as 6.1% YoY in the second quarter of 2022. The domestic equity market, as represented by the S&P/ ASX 300 Accumulation Index, returned 6.0% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 8.0%. Unhedged international equities returned 6.4%, underperforming a hedged exposure as the AUD appreciated against its major global peers.

Emerging Market Equities underperformed, returning -1.7%. Listed property rallied after a large drawdown over the previous quarter. Domestic listed property, as measured by the S&P/ASX 300 A-REIT Index, returned 11.8% and global listed property, as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned 7.7% over the month. The growing concerns of a looming recession pushed longer-term bond yields lower. The Australian 10-year government bond yield moved 38bps lower to 3.06% while the US 10-year Treasury yield moved 10bps higher to 2.65% over the month. The domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 3.4% and the International Fixed Interest, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned 2.5%. Funds allocated to growth assets outperformed those with a higher allocation to defensive assets over the month.

Performance Commentary - August 31, 2021

The domestic equity market, as represented by the S&P/ ASX 300 Accumulation Index, gained 2.6% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, gained 2.7%. Unhedged international equity exposure outperformed hedged exposure as the USD strengthened, returning 3.1%. Emerging market equities returned 3.2%, as measured by the MSCI Emerging Markets Net Total Return Index. Chinese stock performance remained weak due to ongoing domestic regulatory issues and US-China tension. The Indian equity market, on the other hand, has been the top performer among major equity markets over the month. Domestic listed property performed strongly with the S&P/ASX 300 A-REIT Index returning 6.4%, thanks to the increasing vaccination rate. Global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned 1.5% over the month.

The narrative of transitory inflation still holds and the bond market priced long term inflation expectation consistently below the 2.5% mark. The Australian 10-year government bond yield moved 3bps lower to 1.16% over the month whereas the US 10-year Treasury yield moved 9bps higher to 1.31% as of month end. Investment Grade Credit spreads remained flat. As a result, the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 0.1% and the International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -0.2%. Funds with higher allocations to growth assets yielded higher returns to those with a higher allocation to defensive assets, due to stronger returns for growth assets.

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