Benefits of investing in the Bentham Asset Backed Securities Fund - Class I

Active Management: Investments are actively managed and provide investors with access to a diversified portfolio of asset backed securities with a strong focus on capital preservation and the generation of stable income.

Rigorous Investment Approach: Bentham seeks to add value through economic cycles by identifying the most attractive relative value investment ideas on a risk adjusted basis. This is achieved by combining both top down macro and bottom up fundamental analysis and the flexibility to invest in global markets, across both sector and security type.

Experienced Investment Team: The Fund offers access to investment professionals who specialise in domestic and global credit markets with a long track record in managing global asset backed securities.

Income: Globally diversified sources of income targeting monthly income distributions.

Opportunity Set: The Fund aims to take advantage of market inefficiencies in investment grade securitised debt through Bentham's proven investment philosophy and process.

Risk level

Low (SRM 2)

Investor suitability

The Fund is intended to be suitable for investors seeking to invest for at least three years, have a preference for an alternative to government bonds, and who are looking for floating rate global securitised credit exposure.The Fund primarily invests in a diversified portfolio of investment grade global asset backed securities. This product is
likely to be appropriate for a consumer seeking stable income with some capital growth and to be used as a small to 
core allocation within a portfolio where the consumer has a medium investment timeframe and a low risk/return 
profile.

The Fund primarily invests in a diversified portfolio of investment grade global asset backed securities. This product is 
likely to be appropriate for a consumer seeking stable income with some capital growth and to be used as a small to 
core allocation within a portfolio where the consumer has a medium investment timeframe and a low risk/return 
profile.

About the Fund

The Bentham Asset Backed Securities Fund (Fund) is focused on generating income by investing in highly rated investment grade global asset backed securities ("ABS).

The Fund is actively managed, with individual investments made across different global ABS subsectors. The Fund is managed by Bentham Asset Management, which has over 10 years of investment experience in the sector.

Performance objective

The performance objective for the Fund is to exceed the Bloomberg AusBond Bank Bill Index by 1.5% per annum after fees over rolling three year periods while maintaining a minimum average credit quality of A-.

Fund features

• Provides investors access to the global asset backed securities market

• Globally diversified sources of income 

• High credit quality portfolio: minimum 90% allocation to Investment Grade issues 

• Floating rate asset class targeting a total return above cash 

• Low volatility / risk level. Focus on preservation of capital 

• Targeted monthly income distribution 

• Daily unit pricing

How we invest your money

Investment approach

The Fund is actively managed and focused on generating stable income with some capital growth by providing diversified exposure to global ABS subsectors while managing interest rate and currency risk.

Bentham seeks to add value through security selection and subsector allocation, while maintaining a minimum average credit quality of A-.

Bentham employs a top-down approach; active asset allocations across a range of credit sub-sectors are made according to quarterly forecasts of prospective risk-adjusted returns. Drawing on a combination of 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 exposure of 90% to investment grade rated securities and cash equivalents. Bentham aims to minimise credit risk by focusing on risk management 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 securitised credit securities. The Fund's investments include, but are not limited to, collateralised loan obligations, residential mortgage backed securities, commercial mortgage backed securities, aircraft backed securities, and other asset backed securities, government bonds, government backed bonds, derivatives, and cash equivalents.

The Fund uses derivatives as a risk management tool, including currency swaps, interest rate swaps, credit default swaps, total return swaps, repurchase agreements, reverse repurchase agreements, futures and options. The final portfolio reflects Bentham's rigorous fundamental approach to credit portfolio management.

Portfolio construction guidelines promote diversification and credit quality by maintaining a minimum average credit quality of A-, maintaining a minimum exposure of 90% to investment grade rated securities and cash equivalents, and by limiting the maximum portfolio exposure to any single non-investment grade issuer to 2%.

Strategic asset allocation ranges

The Fund gains exposures to various investment markets and asset classes by investing into direct assets. References to asset allocations are references to the exposure of the Fund, not necessarily the physical unit or security held.

The following are indicative asset allocation ranges for the Fund.

• Cash and Cash Equivalents: 0%-35%

• Securitised Credit - rating of AAA to A-: 65%-100%

• Securitised Credit - rating of BBB+ to BBB-: 0%-20%

• Securitised Credit - rating below BBB-, incl. unrated: 0%-10%