29 April 2016
After just five months in the market, the Bennelong Twenty20 Australian Equities Fund (the Fund) has received a ‘highly recommended’ rating from Zenith Investment Partners (Zenith)*.
The Fund is managed by Bennelong Australian Equity Partners (BAEP) and combines a passive, market cap weighted exposure to the S&P/ASX 20 Index with an actively managed investment in a selection of stocks outside this index.
The Fund’s active investment in ex-20 stocks leverages off the same strategy employed by the team in the very successful Bennelong ex-20 Australian Equities Fund. The Bennelong ex-20 Australian Equities Fund has been able to generate a return of 13.72% per annum since inception, which compares favourably to the benchmark’s return over the same time period of 6.2% (both calculated up to 31 March 2016).
Zenith believes the combination of an indexed exposure to the S&P/ASX 20 Index and an actively managed ex-20 component provides investors with an attractive exposure to Australian equities.
In its report, Zenith said that the fee structure was attractive. The management fee is 0.39% (plus a Performance Fee if applicable). The Fund therefore provides an efficient way to gain all-cap exposure to Australian equities.
Julian Beaumont, Investment Director at BAEP, said “There has been an ongoing debate about whether active or passive fund management is best for investors. We believe that both have a place in the Australian market, just in different parts of the market.
“We believe there is a strong case for paying fees where there are genuine prospects for outperformance. Passive investing has its place; in Australia, that place seems to be within the top 20 stocks where the prospects for outperformance are limited. Combining active and passive provides the best of both worlds – lower overall fees whilst retaining the potential for outperformance,” said Julian.
Julian added “appetite for the Fund has so far been very strong”. The Fund has recently been included on the Federation Managed Accounts investment platform.”
Zenith believes the Fund is an innovative product managed by a highly experienced investment team with a demonstrated track record of outperformance. “Although the Fund was launched in December 2015, the strategy has a strong track record that dates back to September 2012,” said Zenith. BAEP has been managing a mandate on behalf of an institutional client since September 2012 that employs the same passive-active concept as the Fund.
The Fund represents a practical solution for retail clients who are increasingly focused on costs, but who do not want to lose the prospect of market-beating returns.
The Twenty20 Fund is the latest addition to BAEP’s suite of funds which includes the Bennelong Australian Equities Fund, Bennelong Concentrated Australian Equities Fund and the Bennelong ex20 Australian Equities Fund.
*The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned April 2016) referred to in this document is limited to “General Advice” (as defined by the Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website.
Zenith usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessment’s and at http://www.zenithpartners.com.au/RegulatoryGuidelines