The Fund is managed as one portfolio but comprises and combines two separately managed exposures:

1. a passive investment in the S&P/ASX 20 Index, achieved by taking an indexed position in each of the constituent securities of this index; and

2. an investment in the securities beyond the S&P/ASX 20 Index.

The Fund’s objective is to outperform the return of the S&P/ASX 300 Accumulation Index by 2% per annum after fees on a rolling three-year basis by combining indexed positions in the S&P/ASX 20 Index securities with an actively managed exposure in primarily Australian securities that are outside the S&P/ASX 20 Index.

Benefits of investing in the Bennelong Twenty20 Australian Equities Fund

The significant benefits of investing in the Fund are:

• Access to a share portfolio that aims to consistently deliver above-benchmark returns over the medium to long term;

• Investing with a quality team of highly experienced investment professionals who undertake comprehensive ongoing research to assess the earnings prospects and relative valuations of the stocks in their investment universe;

• Regular reporting including monthly unitholder statements, half-yearly income distribution statements and annual tax statements; and

• Easy access to your investment information.

Risk level

High

Investor suitability

The Fund is suitable for investors who:

• Are primarily seeking capital growth from a portfolio of Australian stocks;

• Are seeking some income via dividends and franking credits; and

• Have a high tolerance for risk.

About the Fund

The Bennelong Twenty20 Australian Equities Fund primarily aims to provide exposure to the S&P/ASX300 universe, through a combination of actively managed ex-20 stocks and a passive exposure to the top 20 stocks. While providing exposure to the largest valued stocks, the Fund also provides access to Bennelong's successful ex-20 strategy.

Why choose the Twenty20 Fund?

The Fund is an enhanced index strategy. It aims to enhance the return clients receive over and above the S&P/ASX 300 index (the Benchmark').

The Fund is a neat & low cost way to invest into the ASX:

• Its performance mostly replicates that of the market but historically with a little extra return.

• It has a cost of 0.39% (plus a performance fee where applicable).

• It has relatively low turnover and tracking error.

The beauty of the Twenty20 Fund

The manager believes it is more difficult to outperform when investing in the top 20 stocks. The top 20 stocks are well known, heavily researched and have more broker coverage. On the other hand, the manager believes there is more opportunity to outperform when investing in ex-20 stocks which tend to be priced less efficiently.

In this context, it makes sense to index the top 20 stocks in order to keep the overall cost of the Fund down, and to exploit the opportunity to enhance returns via active management in the less efficient ex-20 segment of the market.

What returns will it provide?

Because of the large indexed position, the Fund's returns will quite closely follow the returns of the market. In technical terms, it has a relatively low tracking error.

However, the Fund's returns can deviate from the benchmark because of the active position in ex-20 stocks.

Historically, the Fund has been able to deliver a little extra return over and above the market. This fulfils the purpose of the Fund as an enhanced index fund.

How we invest your money

The Fund is managed as one portfolio but comprises and combines two separately managed exposures:

1. a passive investment in the S&P/ASX 20 Index, achieved by taking an indexed position in each of the constituent stocks of this index; and
2. an investment in the stocks beyond the S&P/ASX 20 Index.

This exposure is managed on an active basis using a fundamental core approach.

The weighting of the S&P/ASX 20 Index and the ex-20 exposures in the Fund will remain within +/-5% of their respective weights in the S&P/ASX 300 Index. The Fund may also invest in securities expected to be listed on the ASX and securities listed, or expected to be listed, on other exchanges where such securities relate to ASX-listed securities. Derivative instruments may be used to replicate underlying positions on a temporary basis and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index.

Asset classes and strategic asset allocation

The Fund can invest in the following asset classes:

• equities:90-100%;

• cash:0-10%; and

• derivatives: 0 - 10% - used to replicate underlying positions on a temporary basis and hedge market and company-specific risks.