The Fund provides this exposure by investing in the Macquarie True Index Global Bond Fund (Underlying Fund). Macquarie is the responsible entity of the Underlying Fund, which is managed by the Investment Manager.

The Fund provides exposure to the performance of the Citigroup (Customised Benchmark) M1 Global ex-Australia hedged to Australian dollars (Index), and is designed to generate a return equal to the Index returns, less 0.12% pa (Index Tracking). 

• Index Tracking eliminates the potential tracking error of the Fund relative to the Index, while providing daily liquidity.
• No management fee while Index Tracking applies.
• Access to the expertise provided by Macquarie Investment  Management.

Aims to provide investors with pre-tax returns that equal the returns of the Citigroup (Customised Benchmark) M1 Global ex-Australia hedged to Australian dollars (Index) less 0.12% pa, known as ‘Index Tracking’.

How we invest your money

True Indexing is designed to result in pre-tax returns for investors that equal the returns provided by the Index. The Fund achieves this by:

• investing in fixed interest, derivatives (including options, futures, warrants and forwards) and cash,

• either directly or through underlying funds that are managed by members of the Macquarie Group (Underlying Investments) with the aim of providing exposure that closely resembles the exposure of the Index, and

• entering into a swap agreement with Macquarie Financial Holdings Pty Limited (Swap Counterparty). If the Underlying Investments outperform the Index, the Swap Counterparty receives this outperformance. If the Underlying Investments underperform the Index, the Swap Counterparty compensates the Fund to the extent of the underperformance.

These arrangements enable the Fund to provide True Indexing regardless of the performance of the Underlying Investments.

The Underlying Fund also enters into a swap agreement with Macquarie Financial Holdings Pty Limited (Swap Counterparty). If the Underlying Investments outperform the Underlying Fund’s Index, the Swap Counterparty receives this outperformance. If the Underlying investments underperform the Underlying Fund’s Index, the Swap Counterparty compensates the Fund to the extent of the underperformance. These arrangements enable the Underlying Fund to provide True Indexing regardless of the performance of the Underlying Investments. 

As the Investment Manager seeks to hedge the Fund’s currency exposure back to Australian dollars, the return of the Fund will reflect the return of the Underlying Fund’s Index and the impact of the passive currency hedge. The Fund’s returns may differ from the returns of the Fund’s index, the J.P. Morgan

Government Bond Index – Global Hedged in AUD (Index), as:

• the Fund’s hedging program may differ from the hedging program used to construct the Index

• the Fund may hold cash as a result of applications and redemptions, and liability accruals1, and

• the Fund will incur some costs (refer to Section 6 of the PDS for details).

Asset allocation

• Australian fixed interest and cash: 100%