Bendigo Defensive Index aims to deliver investment returns after fees in excess of 1.5% above inflation over a full market cycle (typically 7 to 10 years).
Returns relative the benchmark where mixed over the period. Aiding performance was the underweight to global fixed income with preference to Australian inflation linked bonds and cash. Detracting from performance was the underweight exposure to global equities with a preference for cash yielding investments. We believe equity markets are not an attractive proposition at this point given the headwinds to earnings, high valuations and an attractive alternative in fixed income and cash. Whilst we acknowledge equity markets may move higher over the shorter term, we believe a sustained move higher in prices requires robust earnings growth, in which this ingredient is missing from the market.
What is Bendigo Defensive Index Bendigo Defensive Index is an Managed Funds investment product that is benchmarked against Multi-Asset Conservative Investor Index and sits inside the Multi-Asset - 0-20% 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 Bendigo Defensive Index has Assets Under Management of 113.83 M with a management fee of 0.39%, a performance fee of 0.00% and a buy/sell spread fee of 0.21%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Bendigo Defensive Index has returned 0.84% in the last month. The previous three years have returned 1.37% annualised and 3.76% each year since inception, which is when the Bendigo Defensive Index 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 Bendigo Defensive Index first started, the Sharpe ratio is NA with an annualised volatility of 3.76%. The maximum drawdown of the investment product in the last 12 months is -1.18% and -10.6% 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 Bendigo Defensive Index has a 12-month excess return when compared to the Multi-Asset - 0-20% Multi-Manager Index of -2.78% and -1.14% 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. Bendigo Defensive Index has produced Alpha over the Multi-Asset - 0-20% 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 - 0-20% Multi-Manager Index category, you can click here for the Peer Investment Report.
What level of diversification will Bendigo Defensive Index provide?
Bendigo Defensive Index has a correlation coefficient of 0.9 and a beta of 0.68 when compared to the Multi-Asset - 0-20% 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 Bendigo Defensive Index and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Bendigo Defensive Index with the Multi-Asset Conservative Investor Index?
For a full quantitative report on Bendigo Defensive Index compared to the Multi-Asset Conservative Investor Index, you can click here.
Can I sort and compare the Bendigo Defensive Index to do my own analysis?
To sort and compare the Bendigo Defensive Index financial metrics, please refer to the table above.
Has the Bendigo Defensive Index 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 Bendigo Defensive Index?
If you or your self managed super fund would like to invest in the Bendigo Defensive Index please contact The Bendigo Centre, Bendigo VIC 3550, Australia via phone 1300 236 344 or via email -.
How do I get in contact with the Bendigo Defensive Index?
If you would like to get in contact with the Bendigo Defensive Index manager, please call 1300 236 344.
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Bendigo Defensive Index. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - March 31, 2023 Returns for the quarter were positive across all risk profiles with the Funds on average performing in line with the peer group. Aiding returns was positions in gold, in which rallied on concerns of bank failures within the US. Detracting from relative returns was underweight exposures to equities. The Funds continue to be positioned cautiously given our view that growth will continue to slow as global central banks hold interest rates in restrictive territory. More recently we have experienced an increase in liquidity within markets that has seen some reduction in the volatility that was experienced over the past year. Looking forward there are many uncertainties present within markets and we believe a well diversified portfolio across currencies, geographies, bonds, equities, gold and cash to be beneficial in smoothing returns over the upcoming period.
Performance Commentary - December 31, 2022 Returns for the December quarter were strong in absolute terms but laggedthe Benchmark across the risk profiles as risk sentiment improved over theperiod. The Funds are underweight growth assets relative to the benchmarkgiven the Team’s outlook for economic growth. Markets began pricing ahigher probability of a lower terminal cash rate in the US following theNovember inflation print that surprised to the downside. This buoyed riskappetite as lower terminal rates are positive for valuations. However, theteam remains cautious on the outlook for earnings and valuations remainelevated which has the Team more cautious on recent market optimism.Despite the rally, global equities finished the calendar year 18.1% lower. TheFunds are well diversified and are positioned for a range of outcomes ascentral banks try to engineer a soft landing in their pursuit of reducinginflation.
Performance Commentary - September 30, 2022 Returns for the quarter ending September were negative in absolute terms but were stronger than the benchmark for all risk profiles. The investment team holds underweight exposures to growth assets relative to benchmark given the elevated volatility associated with high inflation and rising cash rates. This has benefitted Fund returns with equities and property underperforming overweight exposures such as Australian investment grade credit, alternatives, and cash over the 3-month period. The Team remains cautious on interest rate linked investments such as duration (bonds and high price multiple equities) and property. A low hedge ratio to the US dollar has also benefitted the Funds given the currency’s recent strength as forward indicators of growth soften and interest rate differentials grow making the greenback appealing to investors seeking higher yields.
Performance Commentary - June 30, 2022 Returns for the quarter ending June were negative in absolute terms given allassets except cash returned in the red. However, the Funds outperformedtheir relative benchmarks over the period. The Funds are significantlyunderweight growth exposures which have benefitted benchmark and peerrelative returns. This has been a challenging environment for asset managersgiven rising bond yields have put downward pressure on all asset valuations.Under these conditions the team have taken advantage of higher yieldingdefensive assets in the Funds which will add to core income and withingrowth exposures have pivoted to assets with greater earnings certaintysuch as infrastructure.
Performance Commentary - March 31, 2022 Returns for the period fell short of the Morningstar peer group. Driving the relative return was the lack of exposure to unlisted investments such as private equity, unlisted property, infrastructure and private credit. Given the index, low-cost nature of the Funds, unlisted investments are not currently invested in. Unlisted investments adopt less frequent valuations and hence they are not subject to short term market volatility. Over the quarter we increased weights to Australian equities and global infrastructure, given the favourable dynamics for these asset classes. We have also reduced global credit exposure through our defensive sleeve due to our perception that credit spreads will move outwards.
Performance Commentary - June 30, 2021 Over the quarter investment markets produced high positive returns, resulting in great outcomes across the portfolios. The Funds outperformed the Morningstar peer group over the quarter and over the financial year. Given the strength of the rebound from the Covid lows in March 2020, returns for the financial year ranged from 6.7% for the defensive portfolio up to 28.4% for the high growth. Positioning in Australian inflation linked bonds over fixed coupon bonds benefited the Funds. Inflation linked bonds offer protection within the portfolio against rising inflation and will outperform fixed coupon bonds when inflation rises faster than market interest rates. Detracting from performance was overweight positions in emerging markets which underperformed developed world equities.
Performance Commentary - December 31, 2020 From both a peer relative and absolute return perspective, the Index suite of Funds performed strongly over the quarter. Risk assets across the board all rose sharply, with tilts in favour of emerging markets coupled with an underweight to global infrastructure, proving beneficial.
Over the one year period the standout performer was the Bendigo Defensive Index Fund, in which returned over 3% higher than the Morningstar peer group and was the highest returning fund within its Morningstar peer group and the Bendigo index suite of products. Driving performance was the movement away from fixed bonds into inflation linked bonds through the late March and April market recovery.
Recently the Funds have added an alternatives asset class with the intention of including an exposure to gold, in which we believe adds significant diversification benefits, in particular inflation risk protection. Looking forward, we believe the Funds will be well positioned for any potential rise in inflation with a meaningful exposure to gold, inflation linked bonds and emerging markets.
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