BT Tax Effective Income Fund Overview Product Name BT Classic Investment Funds Fund - NEF APIR RFA0023AU Inception Date November 1993 Fund Status Closed Distribution Frequency Monthly Fact Sheet Fund Size $114.48 million December 2009 ICR (Management Fee) 2.08% As at 30/06/2009 Asset Class Diversified Shares Recommended Investment Timeframe 5 years+ Risk Category Moderate Latest unit prices (entry/exit) information is available at www.bt.com.au Fund Management The Fund is managed by BT Investment Management Limited (BTIM). Investment Objective The Fund aims to provide a regular tax effective income as well as some capital growth over the long term to keep pace with inflation. Investment Strategy The Fund is an actively managed diversified portfolio that invests in Australian shares, Australian property securities, Australian fixed interest, convertible preference shares, cash and alternative investments that offer attractive income streams. The tax effectiveness arises from dividend imputation from Australian shares and tax deferred income from Australian property securities. Investment Performance Growth of $10,000 invested Since inception (net of ongoing fees) 40,000 30,000 Value ($) 20,000 10,000 0 19 9 19 9 19 9 19 9 20 0 20 0 20 0 20 0 20 0 3 5 7 9 1 3 5 7 9 Month Ended BT Tax Effective Income Fund - NEF Benchmark Performance (%) 1 year 3 years 5 years Since 3 months (as at 31/12/2009) (pa) (pa) (pa) Incep.(pa) Income Return 0.66 4.96 10.44 12.49 8.39 Growth Return 0.22 11.42 -12.17 -7.06 -0.47 Total Return 0.88 16.38 -1.73 5.43 7.92 Benchmark Return 0.76 16.35 -1.24 4.93 5.23 Performance returns are calculated net of ICR (Management Fees) and pre tax. Past performance is not a reliable indicator of future performance, the value of your investment can go down as well as up. Asset Allocation Strategic Asset Allocation Neutral Ranges Australian shares 35 20-50 Australian property 20 10-30 Australian fixed interest 23 10-35 Convertible preference shares (hybrid 7 0-15 securities) Alternative investments 0 0-5 Cash 15 5-50 By Sector Allocation (as at 31/12/2009) Australian Equities 40.9% Australian Listed Property 17.4% Australian Fixed Interest 21.1% Cash & Other 20.6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% The market exposure (asset allocation) and holdings of the fund may change significantly each day. Progress of the Portfolio Fund Performance Investment The BT Tax Effective Income Fund outperformed its benchmark during the December quarter after strong gains from our Australian shares and fixed interest portfolios overweighed underperformance from our listed property portfolio. During the period, the Reserve Bank raised the official cash rate three times (to 3.75%). At the same time, the yield on Australian 3-year bonds fell 17 basis points (to 4.66%) while the yield on 10-year bonds gained 28 basis points (to 5.64%). Strategy & Outlook Our view is that the market continues to be in a consolidation phase, driven mainly by a lack of clarity with regards to the success of developed economies in weaning themselves off government stimulus. We believe earnings growth will be the key to determining whether or not companies have gotten too far ahead of themselves and we remain cautious about those companies whose first half earnings may disappoint. We also remain cautious about the outlook for the listed property sector given the lack of earnings growth and relatively unattractive valuations. In terms of fixed interest, the supply of global and domestic bonds remains a concern and we expect that yields will continue to rise. Other Features This fund is open to existing investors with a current holding. There is no minimum amount for additional investments or Regular Investment Plans. Existing investors can manage their investment using BT Online or our automated telephone service BT Link. BT Margin Lending will loan against this Fund via a BT Margin Loan. The Loan to Value Ratio (LVR) for this Fund is 75%. Lending ratios are subject to change without notice. More information? Speak to your financial adviser Visit www.bt.com.au Contact BT Customer Relations 132 135 BT Funds Management Limited ABN 63 002 916 458, AFSL 233724 and BT Funds Management No. 2 Limited ABN 22 000 727 659, AFSL 233720 are the Responsible Entities of the BT Classic Investment Funds Product Disclosure Statement (PDS). BT Funds Management No. 2 Limited ABN 22 000 727 659, AFSL 233720 is the issuer of units in, the BT Tax Effective Income Fund - NEF. These funds are open to additional investments only. The PDS is available by calling BT on 132 135 or visit www.bt.com.au. You should consider the PDS in deciding whether to acquire, or continue to hold, the Fund and consider whether the fund is appropriate for you. This document (Fact Sheet) does not take into account of your objectives, financial situation and needs. Because of this, you should, before acting on information in this document, consider its appropriateness, having regard to your objectives, financial situation or needs and were commend you consult a financial adviser. Performance figures are calculated in accordance with the Investment and Financial Services Association (IFSA) standards. Total returns are calculated to the last day of each month (unless otherwise indicated) using exit prices and assuming reinvestment of distributions (which may include net realised capital gains from the sale of fund assets).
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