Significant Benefits of the Fund

The Fund aims to provide exposure to global credit markets and to generate income with some potential for capital growth over the medium to long term.

The Fund aims to outperform its composite benchmark over the suggested minimum investment timeframe.

The Fund is managed by Bentham who seeks to provide a diversified exposure to domestic and global credit markets with a focus on generating stable investment income.

The Fund is intended to be suitable for investors seeking to invest for at least three years, with a preference for stable income with minimised risk of capital loss.

Investment Approach

The Fund is actively managed and focused on generating stable investment income by providing a diversified exposure to domestic and global credit markets while managing interest rate risk and currency risk. 

Bentham seeks to add value through actively managing allocations across different credit sectors, trading of individual securities and managing its interest rate and currency risk.

Bentham manages the Fund on a top-down basis. Active asset allocations are made according to quarterly forecasts of prospective risk-adjusted returns across a range of credit sectors. Drawing on a combination of both experience and strong relationships with specialist investment managers, Bentham seeks out and identifies global investment opportunities in credit markets with the aim to generate income with some potential for capital growth.

Bentham utilises a bottom-up analysis to select individual investments based on credit fundamentals and market information.

The Fund must maintain a minimum investment of 50% in investment grade rated securities. Bentham aims to minimise credit risk with a focus on capital preservation and a high diversity of investments which would otherwise be difficult to achieve without access to global markets.

Investment Universe and Portfolio Construction

The Fund invests in global credit and fixed interest markets. The Fund's investments include, but are not limited to, Australian and global hybrid securities, global high yield bonds, global syndicated loans, investment grade securities, global capital securities, asset backed securities, equities and derivatives.

The Fund uses derivatives as a risk management tool, including currency swaps, interest rate swaps and credit default swaps. The final portfolio reflects Bentham's rigorous fundamental approach to credit portfolio management. Portfolio construction guidelines promote diversification and credit quality by limiting the maximum portfolio exposure to any single non-investment grade security to 2% of the net asset value of the Fund. The Fund has a minimum exposure of 50% in investment grade securities. 

The Fund may have a net short credit exposure which is not to exceed 35% of the portfolio. The Fund may have up to 10% physical exposure to equity securities and a net portfolio equity delta of 0.3. 

Strategic Asset Allocation Ranges

(These are indicative asset allocation ranges for the Fund. If market movements, investments into or withdrawals from the Fund, or changes in the nature of an investment, cause the Fund to move outside these indicative ranges, or a limit set out in this PDS, this will be addressed by us or Bentham as soon as reasonably practicable. These ranges are based on net exposures and may vary in accordance with hedging.)

Asset Class (Minimum % / Maximum %)

• Australian hybrids: 0 / 50 

• Global hybrids(global/Euro convertible bonds): 0 / 40 

• Global loans (including syndicated loans): 0 / 50 

• Global high yield bonds: 0 / 30 

• Investment grade credit (including global corporate bonds and asset backed securities): 0 / 75

• Cash: 0 / 30 

Asset Allocation Ranges

The Fund gains exposure to various investment markets and asset classes by investing into direct assets and/or indirectly via managed funds. References to asset allocations are references to the exposure of the Fund, not necessarily the physical unit or security held. If market movements, investments into or withdrawals from the Fund, or changes in the nature of an investment cause the Fund to exceed the indicative asset allocations, or a limit set out in the PDS, this will be addressed by us or Bentham as soon as reasonably practicable.