Benefits of investing in the MLC Wholesale Horizon 1 Bond Portfolio

• A conservative portfolio: The Trust is the most conservative of the seven MLC Horizon portfolios. It has a focus on preserving capital while aiming to deliver returns higher than its benchmark. Returns are also expected to be higher than cash investments. To achieve these outcomes, the Trust's average term to maturity will normally be up to 1.25 years, but this exposure to interest rate risk may vary depending on the market environment and interest rates. And foreign currency exposures will generally be substantially hedged to the Australian dollar to remove almost all of the Trust's exposure to currency risk.

• Experience and track record: The Trust is managed using our investment approach. Our investment experts have been successfully managing portfolios for over 30 years, helping clients achieve their investment goals.  

• Risk-management focus: In an unpredictable and constantly changing world, we actively manage risk in the Trust by analysing and understanding the market environment. The insights from this analysis are used to work out the combination of fixed income strategies that our investment experts believe will best achieve the Trust's above-benchmark return objective while focusing on preserving capital.

• Multi-manager approach: We use many specialist investment managers from around the world to find some of the best investment opportunities for the Trust and to manage risk.

• Extensive diversification: The Trust is diversified across different types of fixed income securities and investment managers to enhance returns and preserve capital. Our specialist investment managers choose many securities in Australia and overseas for investment.

Investor suitability

The Trust may be suited to you if:

• you want a portfolio of fixed income securities that is predominantly investment grade and has an average term to maturity that's normally up to 1.25 years

• you want an actively managed portfolio that's diversified across investment managers, types of fixed income, countries, and securities

• preservation of your investment is important but you understand there are risks of investing in fixed income, and

• you want to receive a regular income stream.

About the Fund

The Trust is one of seven MLC Horizon portfolios.

Each MLC Horizon portfolio has a different asset allocation which is expected to deliver a different level of volatility and return. You can choose the portfolio with the asset allocation that suits your investment needs.

The portfolio has a strong bias to defensive assets and some exposure to growth assets. You'll always know where your money is invested because the allocations to these assets are actively managed within defined ranges, in accordance with our changing view of potential risks and opportunities in investment markets.

The portfolio is broadly diversified across asset classes and investment managers from around the world. These managers invest in many companies and securities in Australia and overseas.

You can use the portfolio for your whole portfolio or add it to other investments.

Investment objective

The portfolio aims to provide a return higher than its benchmark (before fees and tax) over 2 year periods. The return is also expected to be higher than cash investments. At the same time, the portfolio aims to preserve your investment over 1 year periods.

How we invest your money

Investment markets are the main driver of the Trust's investment returns. The Trust's allocation to investment markets is shown in its benchmark asset allocation and ranges below. The benchmark asset allocation is invested in defensive assets.

Our investment experts actively look for opportunities to provide better returns, or less risk, than those generated by the benchmark asset allocation and to manage the Trust's exposure to the risks of investing in markets. Our investment experts do this by:

1. Researching and selecting a broad range of mainstream asset classes, and including some exposure to alternative assets and strategies.
2. Adjusting the allocations to the asset classes within the defined ranges shown below.
3. Researching hundreds of investment managers from around the world and selecting the managers they believe are the best for the Trust. These investment managers, who are mainly active managers, choose many companies and securities in Australia and overseas for investment.

The Trust uses all aspects of MLC's approach to investing, outlined in the Product Guide.

Benchmark asset allocation and ranges

(Asset class: Benchmark asset allocation / Ranges)

• Cash: 30% / 0%-60%

• Australian fixed income: 42% / 20%-70%

• Global fixed income: 28% / 15%-50%