BT Wholesale Partner Australian Shares Value (GMO) September 2009 Fund facts BT Partner Funds – BT presents the world’s best equity Minimum suggested investment period 5 years style managers Date of inception November 2002 The BT Partner Funds proposition is to select and Risk profile Dynamic continuously monitor the world’s best equity investment Product size ($m) $312.4 managers, domestically and from around the world, in the Management fee 0.89% pa three style classifications of Growth, Value and Core. APIR code BTA0243AU Fund objective The Fund aims to provide an overall return that exceeds it benchmark over the recommended investment timeframe. Performance vs Benchmark (% pa) This Fund invests in Australian shares with a value 30.0 investment style, and is currently managed by GMO. 25.0 21.6 20.3 About value investment style 20.0 Value investment managers look for bargains—companies 15.0 that have fallen out of favour with the market and are 9.9 11.0 11.3 8.5 8.9 currently undervalued. They purchase shares below their 10.0 ‘intrinsic value’ where they expect that value to be 5.0 4.1 1.6 recognised by other investors in the future. -0.1 0.0 About GMO -5.0 GMO Australia (GMO) was established in late 1995 and is a Fund Benchmark partnership between Grantham, Mayo, Van Otterloo & Co -10.0 3 1 3 5 Since LLC (GMO LLC) and key Australian investment management mont hs year years years Incept . staff. GMO: Investment returns are Pre fee Pre tax. is an active quantitative manager with a growth Benchmark is the S&P/ASX 300 Accumulation Index. investment style has a robust quantitative investment process developed in conjunction with the global GMO group but specifically Sector allocation Co nsumer Discretio nary: 5.5% tailored to the Australian market to identify superior value Co nsumer Staples: 8.9% companies Energy: 4.7% holds an investment philosophy that markets are driven Financial ex P ro perty Trusts : 39.0% by investor sentiment in the short term but that economic Health Care: 2.6% fundamentals determine fair value in the longer term. The Industrials: 4.9% combination of those drivers results in long trends in Info rmatio n Techno lo gy: 0.8% prices followed by reversals. They capitalise on both of M aterials: 21.2% these effects by using both momentum and value P ro perty Trusts : 3.9% strategies. Teleco mmunicatio n Services: 6.0% their quantitative style allows them to continually monitor Utilities: 1.5% over 500 companies listed on the ASX. This produces a portfolio diversified across a large number of stocks which Cash: 1.0% they believe improves the consistency and sustainability of performance over time. has a focus on rigorous research and development of quantitative models, as well as on efficient execution of trades. Manager history Top 10 holdings Manager Appointed Replaced Stock Allocation % GMO Australia November 2002 BHP Billiton 12.6% Commonwealth Bank of Australia 6.7% Westpac Banking 6.2% Commentary from GMO Telstra 5.7% The portfolio underperformed its benchmark for the quarter. National Australia Bank 5.6% Globally, signs continue to point to slower growth. The US Macquarie Group 4.6% has increasing unemployment, mixed economic news, and Australia & New Zealand Banking Group 4.2% questionable valuations. The story is not much different in QBE Insurance Group 3.9% Europe. The underweight to the most expensive stocks has started to benefit the portfolio whereas in the past these were Rio Tinto 2.9% more momentum oriented and hurt. At the sector level, Woolworths 2.6% underweights to energy, materials, and gold added value as well as overweights to higher quality and cheaper discretionary stocks and financials. An overweight to telecom Key performance contributors and detractors stocks helped while an underweight to the volatile LPT’s hurt Key performers Contribution % as they jumped in September. The price momentum and intrinsic value streams outperformed the benchmark while Macquarie Group 0.5% earnings revisions and composite value underperformed. T Qantas Airways 0.2% National Australia Bank 0.2% Outlook from GMO Suncorp-Metway 0.1% We continue to see market volatility in the near term. While it Fairfax Media 0.1% appears Australia, and the world, has escaped from the most dire of forecasts, it also appears securities are priced for a Key detractors Detraction % return to the glory days of market returns. For the current market run to continue, securities will need to deliver on very Telstra -0.4% high expectations. Some will fill that bill, but others will Caltex Australia -0.3% disappoint. We are positioned in the firms with a history of AMP -0.1% stable long term earnings and attractive valuations. Lion Nathan -0.1% Leighton Holdings -0.1% BT Funds Management Limited ABN 63 002 916 458 is the responsible entity of the BT Partner Australian Value 1 Fund (Fund) and is the issuer of units in the Fund. A Product Disclosure Statement (PDS) is available for the Fund and can be obtained by calling 1800 813 886 or online at www.bt.com.au . You should obtain and consider the PDS before deciding whether to acquire, or continue to hold, units in the Fund. This fact sheet has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. Total returns for the Fund are calculated to the last day of each month using exit prices. Total return figures assume distributions are reinvested and issuer fee and expenses are deducted but contribution fees (where payable) and taxes are not. Returns are historical and past performance is not a reliable indicator of future performance. This fact sheet is updated quarterly and is accurate at the time of publishing. We may change the investment characteristics of the Fund at any time.
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