Recently a notice is being published on ASX regarding the introduction of Bentham Asset-Backed Securities Fund- Class 1 with the fund code BAM06. This fund is effective from 30 November 2018. This fund is responsible for generating income in such a way that the capital preserved by investing in highly rated global backed securities. Bentham Asset Management is managing this fund.
This fund aims to provide exposure towards investment made in the asset-backed securities while generating a stable source of capital generation.
The strategic positioning of this fund is in such a way which considers an assessment of top to down macroeconomic and investment market conditions which is achieved based on the forecast done on the active allocation on a quarterly manner based on risk adjusted return.
When it comes to individual investors, the strategy of the fund is the bottom-up analysis. The selection of the portfolio is conservative where the emphasis given to the preservation of the principal amount.
From the investor's point of view, this fund provides global exposure of asset-backed securities. The investors mitigate the risk of individual funds through diversification of the portfolio. A minimum of 90% of the allocation done in the investment grade issues. It provides a floating rate of interest. This fund generates income on a monthly basis and unit pricing done on a daily basis.
Since the inception of the fund, the total return (after fee) was 4.41% which is outperforming based on the benchmark “Bloomberg AusBond Bank Bill Index”. As per the portfolio summary statistics, the yield to maturity of the fund is 4.19%. There are around 90 securities under this fund with the interest rate duration of 3 months. The size of the fund is A$131,236,454.
The breakdown of the fund consists of 39.8% in into “US Broadly Syndicated Collateralized Loan Obligations”. Around 17.3% of the total fund invested in “UK Residential Mortgage Backed Securities (RMBS)”. Almost 11.7% of the total fund invested in “middle market Collateralized Loan Obligations”. 9.7%v of the fund in European Collateralized Loan Obligations, 6.8% in aircraft asset-backed securities, 7.2% of the total funds in cash and derivatives, 4.9% in “Australian Residential Mortgage Backed Securities”, 1,9% on credit card asset-backed securities, 0.4% towards personal loan asset-backed securities and 0.3% in German Residential Mortgage Backed Securities. The performance of the fund is driven by the US Broadly Syndicated Collateralized Loan Obligations and UK Residential Mortgage Backed Securities.
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