JUNE 2020 IOOF MULTISERIES IOOF MULTIMIX IOOF CASH MANAGEMENT IOOF BALANCED INVESTOR
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IOOF INVESTMENTS SNAPSHOT June 2020 IOOF MultiSeries IOOF MultiMix IOOF Cash Management IOOF Balanced Investor
IOOF Investments Snapshot | June 2020
IOOF Investments
Investment management team enhanced
Our impressive investment results are driven by an experienced team and we have enhanced
our capabilities by integrating with the recently acquired ANZ Wealth investment team.
The acquisition has enabled us to expand our portfolio management function, adding further depth and focus across each asset class.
Further, we have a new dedicated asset allocation capability which will support us with additional insights and play an important
role in the development of both our strategic and dynamic asset allocation views. Two new portfolio managers will also add further
support to the consideration of Environmental, Social and Governance (ESG) factors for the team as we look to further integrate
Responsible Investing across all aspects of our investment process.
The performance and analytics function has also been boosted and portfolio managers will be further supported in their investment
decision-making process by increased risk and performance analytics and reporting. We have also expanded our implementation
team giving us increased capability across portfolio execution, currency management, risk mitigation strategies and derivatives.
In addition, we now have a dedicated governance area.
Dan Farmer Stanley Yeo Manish Utreja
Chief Investment Officer Deputy Chief Investment Head of Alternatives
Officer & Head of Equities
Osvaldo Acosta Kerry Duce Rhodri Payne
Head of Fixed Head of Asset Allocation Head of Investment
Interest Assets Execution
Simon Gross David Djukanovic Michele Streight
Head of Property Head of Portfolio Head of Investment
Implementation Governance
Investment Specialist team
Charles Kneale Tim Casey Neil Armistead Jennifer McLean
Investment Specialist Investment Specialist Investment Specialist, Client Engagement
(VIC, SA, WA and TAS) (NSW, ACT and QLD) IOOF Practice Specialist
Management
2IOOF Investments Snapshot | June 2020
Contents
Market insight IOOF Trust
Market and economic snapshot 4 IOOF Cash Management 14
Strategic tilting update MultiMix wholesale single sector trusts
Cash and fixed interest 5 Property 15
Currency 5 Alternatives and Defensive Equities 16
IOOF MultiSeries IOOF MultiMix diversified trusts
Summary 6 IOOF MultiMix Capital Stable 17
Underlying investment managers 7 IOOF MultiMix Conservative 17
IOOF MultiSeries diversified trusts IOOF MultiMix Moderate 18
IOOF MultiMix Balanced Growth 18
IOOF MultiSeries 30 8
IOOF MultiMix Growth 19
IOOF MultiSeries 50 8
IOOF MultiSeries 70 9 MySuper fund
IOOF MultiSeries 90 9 IOOF Balanced Investor 19
IOOF MultiMix
Summary 10
Underlying investment managers 11
IOOF MultiMix single sector trusts
IOOF MultiMix Australian Shares 12
IOOF MultiMix International Shares 12
IOOF MultiMix Diversified Fixed Interest 13
IOOF MultiMix Cash Enhanced 13
3IOOF Investments Snapshot | June 2020
Market and economic snapshot
The COVID-19 health crisis is, first and foremost, a human tragedy but lockdown and
isolation measures designed to control the spread have had destructive economic
consequences at home and abroad.
The negative effect on share markets has been swift and possibly because reopening started before a sharp downtrend
substantial. Large share market falls across most regions were in new cases. Australia has also seen an outbreak centred
seen in March, as supply chains were disrupted, and business in Victoria that is a meaningful second wave and has resulted
activity was restricted to try and contain the pandemic. in lockdown and further economic damage.
Shutdown measures squeezed companies’ turnover and
profits, and damaged consumer confidence. Economic damage
If countries need to delay reopening efforts to slow an
Governments and central banks reacted swiftly to prop up
escalation of infections, bankruptcies may surge, and
economies with enormous fiscal and monetary responses.
unemployment could go even higher. That said, governments
These response measures, along with some considerable
and central banks are still applying large fiscal and monetary
success in flattening infection curves, have seen share markets
support in meaningful amounts which should provide some
in most major countries claw back some of their significant
offset to the economic impacts of the pandemic.
losses in recent months, as you can see in the graphs below:
The Australian Share Market (ASX 300) Escalation of US-China tensions
7500
Tensions between the global superpowers have been rising
7000
for some time but have been exacerbated across a swathe
6500
of issues, backdropped by the World Health Organisation’s
6000 agreement to run a COVID-19 inquiry. China’s move to
5500 introduce a controversial security law tightening control of
5000 Hong Kong has also added to frictions. And with an election
4500 nearing, US/China tensions may escalate further posing even
4000 more risks for markets. A ‘technology cold war’ between the US
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and China that has been with us for some time has intensified.
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The US Share Market (S&P 500) Vaccine
3600 Meaningful progress is being made to develop and bring
3400 to market a number of vaccines around mid-2021. At this
3200
stage greater clarity regarding the effectiveness of current
3000
front runners should emerge by late 2020, most likely across
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multiple vaccines. However, time will still be required to
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ensure lingering side effects do not develop, the length
2200 of time immunity lasts and for manufacturing to ramp up.
2000 This suggests mid-2021 as a possible launch date.
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Investing in highly uncertain times
31
The graphs above show the performance of the S&P 500 Price Index and ASX
Price Index from 1 January 2020 to 30 June 2020.
While there are clearly substantial risks still at play on the
Source: FactSet, IOOF
health, political, economic and geopolitical fronts, we are
What may be ahead? seeing considerable signs of improvement across key lead
economic indicators that the worst of the initial decline in
While the share market has been buoyed by the promise of
growth is now passing. However, it remains uncertain what
additional fiscal support and the fact that a return to work is
growth will look like after the initial bounce and fiscal support
already beginning to happen, we’re not ‘out of the woods’
starts to unwind.
just yet. Three key risks remain, leaving the market vulnerable
to possible setbacks:
A second wave
The global daily COVID-19 case count remains stubbornly high
and trends are also up in emerging countries such as Brazil,
Dan Farmer
India, Bangladesh, Indonesia and Saudi Arabia. The US has seen
Chief Investment Officer
a surge in infections as lockdown restrictions were relaxed,
4IOOF Investments Snapshot | June 2020
Strategic tilting update
Cash and fixed interest Currency
Position Position
For both MultiMix and MultiSeries, there is an overweight to For MultiMix, the hedged benchmark remains at 10% of the
cash/short duration strategies, underweight to fixed interest. developed equities portfolio versus the strategic benchmark
of 25%. For MultiSeries, the hedged benchmark remains at
Rationale 20% versus the strategic benchmark of 25%.
Our view is that Australian and US Government bond yields
are very expensive. The US 10-year Government bond yield
Rationale
as at end of June was 0.65%, down from 0.70% at the end The key reason for this continued underweight position is
of March. because unhedged international equities provides a natural
hedge in the event of an equity market correction. If equity
Current status markets fall, the Australian dollar tends to fall with it (as
Since inception, the tilt to cash has underperformed as it is considered a risk asset), thus protecting the value for
global bonds continue to produce positive returns. However, unhedged investors.
the underperformance is somewhat mitigated by strong
performance from the underlying cash managers, and
Current status
strong returns from the IOOF Income Trust. For the June quarter, the unhedged developed
international shares benchmark underperformed the
For MultiMix over the June quarter, the IOOF Income Trust
hedged developed international shares benchmark by
returned 2.49% versus the diversified fixed interest strategic
-11.88% (5.94% versus 17.82%).
benchmark return of 1.39%.
For MultiSeries over the June quarter, the Metrics Credit
Partners Diversified Australian Senior Loan Fund returned
1.10% and the Janus Henderson Income Fund returned
4.64% versus the MultiSeries Fixed Income strategic
benchmark return of 1.39%.
5IOOF Investments Snapshot | June 2020
IOOF MultiSeries
Summary
Full details of the investment strategy, objectives and underlying managers for each Trust are
provided in the trust profile which can be downloaded from www.ioof.com.au/investment-central
Trust APIR code Risk/return profile Estimated Growth / Defensive
management costs
% pa*
MultiSeries diversified
IOOF MultiSeries 30 IOF0253AU Low to medium 0.40
Growth 30%
Defensive 70%
IOOF MultiSeries 50 IOF0254AU Medium 0.45
Growth 50%
Defensive 50%
IOOF MultiSeries 70 IOF0090AU Medium to high 0.50
Growth 70%
Defensive 30%
IOOF MultiSeries 90 IOF0255AU High 0.55
Growth 90%
Defensive 10%
* The estimated management costs are based on the actual full financial year 2020 figures. The estimated management cost includes the investment management fee
and indirect costs. See pages 16 to 20 of the IOOF MultiSeries PDS for full details on fees and costs. The management costs are subject to change from time to time.
6IOOF Investments Snapshot | June 2020
Underlying investment managers
Over the last quarter the following changes were made to our underlying investment manager line-up.
New inclusion in the trusts: Challenger Enhanced (international shares), Western Asset Management MAC (international fixed interest).
Removal from the trusts: Goldman Sachs (international shares).
Manager Style
IOOF Investment Services Ltd Short-term money market securities
short-term
securities
Cash and
Janus Henderson Investors (Australia) Funds Management Active Australian fixed interest
Limited
Diversified fixed interest
Ardea Investment Management Diversified fixed income and total return Australian
fixed income
Metrics Credit Partners Pty Limited Australian corporate loans
Western Asset Management Company Australian bonds and global high-grade multi-asset credit
Stone Harbor Investment Partners LP Emerging market debt
Brandywine Global Investment Management, LLC Top-down, value-driven
IOOF MultiSeries 30, 50, 70 and 90
Invesco Australia Limited International core fixed income
Property
IOOF Investment Services Ltd Core
Macquarie Investment Management Limited Passive listed Australian and global property securities
Acadian Asset Management (Australia) Limited Small companies
AllianceBernstein Investment Management Australia Limited Concentrated value
Australian shares
The Northern Trust Company of Hong Kong Limited Quantitative quality and momentum
Yarra Funds Management Limited Style neutral
Invesco Australia Limited Quantitative 130/30
IOOF QuantPlus Enhanced passive
State Street Global Advisors, Australia, Limited Enhanced passive
Alphinity Investment Management Pty Ltd Quality with earnings leadership
International shares
Brown Advisory Limited Global equities
Challenger Limited Index plus a margin of up to 1.4%pa
Neuberger Berman Australia Pty Limited Emerging markets
TT International Emerging and developed markets
Invesco Australia Limited Global targeted return
Alternatives
AllianceBernstein Investment Management Australia Limited Diversified alpha
Macquarie Investment Management Limited Passive listed global infrastructure
Metrics Credit Partners Pty Limited Secured Australian private debt and real estate debt
For more information about the changes, please visit Investment Central.
7IOOF Investments Snapshot | June 2020
IOOF MultiSeries diversified trusts
IOOF MultiSeries 30 IOOF MultiSeries 50
Performance2 Performance2
3 6 1 2 3 5 7 3 6 1 2 3 5 7
mths mths year year year year year mths mths year year year year year
% % % % % % % % % % % % % %
pa pa pa pa pa pa pa pa
Distribution 3.88 3.76 6.04 4.60 4.26 na na Distribution 4.00 3.76 6.13 4.84 4.84 na na
Growth -0.09 -3.09 -2.64 0.71 0.98 na na Growth 1.09 -4.96 -3.79 0.36 1.12 na na
Total 3.79 0.67 3.40 5.31 5.24 na na Total 5.09 -1.20 2.34 5.20 5.95 na na
Benchmark 2.78 0.12 2.30 4.79 4.84 na na Benchmark 4.66 -1.69 1.53 4.98 5.71 na na
Comments Comments
Western Asset Management was appointed to the fixed Western Asset Management was appointed to the fixed
interest portfolio in May 2020 to manage a multi-asset credit interest portfolio in May 2020 to manage a multi-asset credit
fund. Goldman Sachs multi-factor strategy was replaced with fund. Goldman Sachs multi-factor strategy was replaced with
Challenger Index Plus in the international equities portfolio Challenger Index Plus in the international equities portfolio
in June 2020. in June 2020.
Contributors and Detractors Contributors and Detractors
Contributors to performance Contributors to performance
• Diversified fixed interest portfolio outperformed, with all • Diversified fixed interest portfolio outperformed, with all
underlying managers outperforming their benchmarks. underlying managers outperforming their benchmarks.
Brandywine, Invesco and Janus Henderson performed Brandywine, Invesco and Janus Henderson performed
particularly well. Of note, Stone Harbor emerging market particularly well. Of note, Stone Harbor emerging market
debt strategy returned in excess of 16%. debt strategy returned in excess of 16%.
• Alternatives portfolio also outperformed, with solid • Alternatives portfolio also outperformed, with solid
performance from private debt manager, Metrics. performance from private debt manager, Metrics.
Detractors from performance Detractors from performance
• International equities portfolio underperformed its • International equities portfolio underperformed its
benchmark as a result of underperformance from TT benchmark as a result of underperformance from TT
International, Alphinity and Goldman Sachs multi- International, Alphinity and Goldman Sachs multi-factor
factor strategy. strategy.
Actual versus target allocation Actual versus target allocation
50 40
35
40
30
30 25
20
20 15
10
10
5
0 0
Australian International Property Alternatives Diversified Cash and Australian International Property Alternatives Diversified Cash and
Shares shares fixed short-term Shares shares fixed short-term
interest securities interest securities
8 Actual allocation Target allocation Actual allocation Target allocationIOOF Investments Snapshot | June 2020
IOOF MultiSeries 70 IOOF MultiSeries 90
Performance2 Performance2
3 6 1 2 3 5 7 3 6 1 2 3 5 7
mths mths year year year year year mths mths year year year year year
% % % % % % % % % % % % % %
pa pa pa pa pa pa pa pa
Distribution 3.62 3.30 5.63 4.93 5.34 7.87 7.48 Distribution 3.25 2.85 4.87 4.73 5.45 na na
Growth 3.04 -6.15 -4.36 0.08 1.18 -1.66 0.49 Growth 4.50 -8.35 -5.72 -0.77 0.97 na na
Total 6.66 -2.85 1.26 5.01 6.52 6.21 7.97 Total 7.75 -5.50 -0.86 3.96 6.42 na na
Benchmark 6.81 -3.32 0.65 4.84 6.34 6.60 8.28 Benchmark 8.35 -5.45 -0.70 4.33 6.56 na na
Comments Comments
Western Asset Management was appointed to the fixed Western Asset Management was appointed to the fixed
interest portfolio in May 2020 to manage a multi-asset credit interest portfolio in May 2020 to manage a multi-asset credit
fund. Goldman Sachs multi-factor strategy was replaced with fund. Goldman Sachs multi-factor strategy was replaced with
Challenger Index Plus in the international equities portfolio Challenger Index Plus in the International equities portfolio
in June 2020. in June 2020.
Contributors and Detractors Contributors and Detractors
Contributors to performance Contributors to performance
• Diversified fixed interest portfolio outperformed, with all • Diversified fixed interest portfolio outperformed, with all
underlying managers outperforming their benchmarks. underlying managers outperforming their benchmarks.
Brandywine, Invesco and Janus Henderson performed Brandywine, Invesco and Janus Henderson performed
particularly well. Of note, Stone Harbor emerging market particularly well. Of note, Stone Harbor emerging market
debt strategy returned in excess of 16%. debt strategy returned in excess of 16%.
• Alternatives portfolio also outperformed, with solid • Alternatives portfolio also outperformed, with solid
performance from private debt manager, Metrics. performance from private debt manager, Metrics.
Detractors from performance Detractors from performance
• International equities portfolio underperformed its • International equities portfolio underperformed its
benchmark as a result of underperformance from TT benchmark as a result of underperformance from TT
International, Alphinity and Goldman Sachs multi- International, Alphinity and Goldman Sachs multi-
factor strategy. factor strategy.
Actual versus target allocation Actual versus target allocation
30 40
35
25
30
20
25
15 20
15
10
10
5
5
0 0
Australian International Property Alternatives Diversified Cash and Australian International Property Alternatives Diversified Cash and
Shares shares fixed short-term Shares shares fixed short-term
interest securities interest securities
Actual allocation Target allocation Actual allocation Target allocation 9IOOF Investments Snapshot | June 2020
IOOF MultiMix
Summary
Full details of the investment strategy, objectives and underlying managers for each Trust is
provided in the trust profile which can be downloaded from www.ioof.com.au/investment-central
Trust APIR code Risk/return Estimated Estimated Total estimated
profile management fees performance- management
%pa related fees costs (including
%pa^ performance-
related fees) % pa*1
IOOF MultiMix single sector
IOOF MultiMix Cash IOF0091AU Low 0.36 Nil 0.36
Enhanced
IOOF MultiMix IOF0096AU Low/Medium 0.50 0.05 0.55
Diversified Fixed
Interest
IOOF MultiMix IOF0092AU High 0.80 0.36 1.16
Australian Shares
IOOF MultiMix IOF0098AU High 0.90 0.00 0.90
International
Shares
IOOF MultiMix diversified
IOOF MultiMix IOF0094AU Low 0.52 0.03 0.55
Capital Stable
IOOF MultiMix IOF0095AU Low/Medium 0.73 0.04 0.77
Conservative
IOOF MultiMix UFM0051AU Medium 0.79 0.05 0.84
Moderate
IOOF MultiMix IOF0093AU Medium/High 0.92 0.11 1.03
Balanced Growth
IOOF MultiMix IOF0097AU High 0.96 0.13 1.09
Growth
IOOF Cash Management and Balanced Investor
IOOF Cash PIM0002AU Low 0.30 N/A 0.30
Management
(Class A)
IOOF Balanced IOF0232AU Medium/High 0.50 N/A 0.50
Investor
* The estimated management costs are based on the actual full financial year 2020 figures. Total estimated management costs include the management fee and any
applicable performance-related fees, and are subject to change from time to time. Refer to the applicable PDS for full details on fees and costs.
^ Performance-related fees may be charged by underlying investment managers of the IOOF MultiMix Trusts from time to time and may vary.
10IOOF Investments Snapshot | June 2020
Underlying investment managers
Over the last quarter the following changes were made to our underlying investment manager line-up.
New inclusions in the trusts: Western Asset MAC (international fixed interest), Infrastructure Capital Group (alternatives defensive).
Removal from the trusts: None.
Manager Style
Janus Henderson Investors (Australia) Funds Active
Cash and short-
Enhanced Trust
term securities
MultiMix Cash
Management Limited
IOOF
Pendal Institutional Limited Relative value credit
IOOF MultiMix Diversified Fixed Interest Trust
IOOF Investment Services Ltd Short-term money market
securities
Janus Henderson Investors (Australia) Funds Active Australian fixed interest
Management Limited
IOOF MultiMix Capital Stable Trust
Ardea Investment Management Total return Australian fixed income
IOOF MultiMix Conservative Trust
Metrics Credit Partners Pty Limited Australian corporate loans
Stone Harbor Investment Partners LP Emerging market debt
fixed interest
Diversified
Brandywine Global Investment Management, Top-down, value-driven
LLC
IOOF MultiMix Balanced Growth Trust
PIMCO Australia Pty Ltd Global bonds
T. Rowe Price International core fixed income
IOOF MultiMix Growth Trust
Bentham Asset Management Pty Ltd Syndicated loans
IOOF MultiMix Moderate Trust
Western Asset Management Company Australian bonds, Global Total
Return and global high-grade
multi-asset credit
Fidante Partners Limited Broad cap core
IOOF Investment Services Ltd Core
Legg Mason Martin Currie Australia Limited Small cap
Property
Pendal Institutional Limited Active, value-driven, risk-controlled
Cohen & Steers Capital Management, Inc. Active, core, bottom-up
Resolution Capital Limited High conviction, benchmark-
unaware
AllianceBernstein Investment Management Managed volatility and
IOOF MultiMix Australian Shares Trust
Australia Limited concentrated value
Acorn Capital Limited Micro-caps, active long only
Invesco Australia Limited Quantitative, bottom-up,
Australian shares
multi‑factor approach
Quest Asset Partners Pty Limited Fundamental quality and growth
Vinva Investment Management Limited Quantitative
Legg Mason Martin Currie Australia Limited Dynamic value
OC Funds Management Limited Small cap and micro-cap
Northcape Capital Pty Ltd Quality
Boutique Manager Portfolio Diversified Australian shares
Defensive Equities Trust Defensive equities
EAM Global Investors LLC Emerging markets small caps
IOOF MultiMix International
Alphinity Investment Management Pty Ltd Quality with earnings leadership
International shares
Wellington International Management Growth
Company Pte Ltd
Shares Trust
The Northern Trust Company of Multi-factor
Hong Kong Limited
Antipodes Partners Pragmatic value, absolute return
TT International Growth at reasonable price and
concentrated quality
Thomson Horstmann & Bryant, Inc. Micro-caps
Alternatives
We have a large number of underlying managers for our exposure to alternative
assets. These managers are not listed separately due to the size of the list and the
fact that the allocation to each manager is small.
For more information about the changes, please visit Investment Central.
11IOOF Investments Snapshot | June 2020
IOOF MultiMix single sector trusts
IOOF MultiMix Australian Shares IOOF MultiMix International Shares
Performance2 Performance2
3 6 1 2 3 5 7 3 6 1 2 3 5 7
mths mths year year year year year mths mths year year year year year
% % % % % % % % % % % % % %
pa pa pa pa pa pa pa pa
Distribution 10.01 7.65 9.13 10.27 11.30 8.83 7.40 Distribution 5.46 5.04 5.78 6.91 13.37 17.23 13.34
Growth 7.33 -18.00 -11.60 -7.03 -3.89 -1.28 1.27 Growth 0.04 -7.70 -1.40 -0.60 -4.58 -8.31 -1.13
Total 17.34 -10.35 -2.46 3.23 7.41 7.55 8.67 Total 5.50 -2.66 4.39 6.31 8.79 8.92 12.21
Benchmark 16.79 -10.55 -7.61 1.45 5.24 6.00 7.48 Benchmark 5.83 -4.13 4.37 7.78 10.13 8.89 12.41
Comments Comments
There were no changes over the quarter. There were no changes over the quarter.
Contributors and Detractors Contributors and Detractors
Contributors to performance Contributors to performance
• Overweight to small- and micro-caps which outperformed • Growth manager Wellington continues to perform
the broader market. well as the growth factor continues to significantly
• Outperformance from small- and micro-cap managers, outperform value.
Acorn and OC. • In a reversal from the previous quarter, small caps
• Vinva outperformed due to positive contribution from their outperformed, particularly in emerging markets, with EAM
behavioural and segmentation signals. emerging market small caps returning in excess of 15% and
THB international micro caps returning in excess of 14%.
Detractors from performance
Detractors from performance
• Strategies managed by Bioscience underperformed the
broader market. • Antipodes was the largest detractor as the low market
exposure was a headwind in a strong market.
• Exposure to cash held back returns as the market rallied
strongly. • Alphinity, TT International’s global concentrated portfolio,
and Northern Trust’s value portfolio all underperformed over
• AB managed volatility underperformed due to an
the quarter.
overweight to cash, an underweight to IT and challenging
stock selection in Financials.
Investment manager allocation#,3 Investment manager allocation#,3
Quest Asset Partners Pty Limited 12.19% Northcape Capital Pty Ltd 11.37% The Northern Trust Company TT International 24.26%
of Hong Kong Limited 15.16%
IOOF Investment
Services Ltd 4.69% Legg Mason Martin Alphinity Investment
Currie Australia Management Pty Ltd
AllianceBernstein Investment Limited 12.71% 15.25% EAM Global
Management Australia Limited Investors LLC 6.35%
13.45% OC Funds Thomson Horstmann
Management & Bryant, Inc. 5.18%
Acorn Capital Limited 6.16% Antipodes Partners
Limited 9.86%
16.07%
Vinva Investment IOOF Investment
Management Limited 14.72% Services Ltd 0.86% Wellington International
Boutique Manager
Portfolio 13.98% Management Company
Invesco 0.86% Pte Ltd 16.88%
# Please note the data is based on the actual underlying investment.
12IOOF Investments Snapshot | June 2020
IOOF MultiMix Diversified Fixed Interest IOOF MultiMix Cash Enhanced
Performance2 Performance2
3 6 1 2 3 5 7 3 6 1 2 3 5 7
mths mths year year year year year mths mths year year year year year
% % % % % % % % % % % % % %
pa pa pa pa pa pa pa pa
Distribution 5.58 5.61 6.63 5.55 4.68 5.57 5.46 Distribution 0.21 0.40 1.12 1.47 1.75 2.10 2.40
Growth -1.17 -2.64 -2.02 0.19 -0.16 -1.01 -0.65 Growth 0.65 0.28 0.23 0.30 0.16 0.02 0.04
Total 4.41 2.98 4.61 5.74 4.52 4.55 4.82 Total 0.87 0.68 1.35 1.77 1.90 2.11 2.44
Benchmark 1.39 3.56 4.69 6.52 5.15 4.77 5.19 Benchmark 0.06 0.32 0.85 1.41 1.53 1.73 1.99
Comments Comments
Strong performance for the quarter from credit sectors and Outperformance was driven by active strategies with
active duration managers. The portfolio was rebalanced from overweight interest rate duration, yield curve flattening bias,
Ardea and duration managers into credit strategies including a credit spread contraction and the strong performance of
new opportunistic mandate with Western Asset global high- high quality corporate floating rate notes. An overweight
grade multi-asset credit. These strategies generated between allocation to inflation-linked bonds and semi-governments
8-16% returns, reversing most of the losses experienced in March. also contributed to performance.
Contributors and Detractors Contributors and Detractors
Contributors to performance Contributors to performance
• Managers with credit like Western Asset, Stone Harbor and • Allocation to Term Deposits, NCDs and cash notice
Bentham, and active duration managers like Brandywine accounts has contributed to the performance over
and T. Rowe Price were strong contributors. the quarter.
• Overweight interest rate duration, credit spread contraction
Detractors from performance and an allocation to inflation-linked bonds also contributed
• No negative detractors. to performance.
• In the credit sector financials, infrastructure, industrials
drove the performance.
Detractors from performance
• There were no significant detractors from performance.
Investment manager allocation#,3 Investment manager allocation#,3
Stone Harbor Investment Partners LP 6.60% Janus Henderson
Investors (Australia)
Ardea Investment Funds Management
IOOF Investment
Management 18.53% Limited 12.56%
Services Ltd 18.31%
T.Rowe Price
Bentham Asset International Ltd 6.92% Pendal Institutional
Management Limited 44.03%
Pty Ltd 6.42% PIMCO Australia
Pty Ltd 6.66%
Janus Henderson
IOOF Investment
Brandywine Global Investors (Australia)
Services Ltd
Investment Management, Funds Management
7.40%
LCC 16.63% Limited 37.66%
Western Asset Management
Company 18.26%
# Please note the data is based on the actual underlying investment.
13IOOF Investments Snapshot | June 2020
IOOF Trust
IOOF Cash Management
Performance2
3 6 1 2 3 5 7
mths mths year year year year year
% % % % % % %
pa pa pa pa
Total 0.13 0.41 1.07 1.57 1.68 1.88 2.15
Benchmark 0.06 0.32 0.85 1.41 1.53 1.73 1.99
Comments
The trust continued its outperformance of the Bank Bill Index.
Money market yields dropped during the quarter. RBA left the
interest rate at 0.25%. 3-month bank bill rates fell by 27 bps to
0.10% and 6-month bank bill rates declined by 38 bps to 0.16%.
Bank bill rates reflected liquidity expansion provided by the
RBA since March 2020.
The trust remains well-exposed to improvements in short-term
funding markets.
Contributors and Detractors
Contributors to performance
• Allocation to Term Deposits, NCDs and cash notice
accounts has contributed to the performance over
the quarter.
Detractors from performance
• There were no significant detractors from performance.
Allocation by Standards & Poors ratings3
TOTAL "A-2" 15.9%
TOTAL "A-1+" 50.9%
TOTAL "A-1" 33.2%
14IOOF Investments Snapshot | June 2020
MultiMix wholesale single sector trusts
Property
Property – Australian Investment manager allocation3
Comments IOOF Investment
Services Ltd 0.98%
The COVID-19 emergency is still very much the prime
concern for investors, however the AREIT portfolio and sector Fidante Partners
Limited 49.10%
rebounded in the June quarter generating a very strong return. Legg Mason Martin
Currie Australia Limited
Contributors to performance 49.92%
• Underweight allocations to Dexus commercial office
added value.
• Some overweight to the retail sector that recovered strongly
relative to other asset classes also added value.
Detractors from performance
• Underweight allocations to the Goodman Industrial Group
detracted value.
Property – International Investment manager allocation3
Comments IOOF Investment
Services Ltd 1.20%
The GREIT sector continues to be volatile but generated a Pendal Institutional
Limited 15.42%
positive return as the market recovered from a very poor
COVID-19 related start to the calendar year. The retail sector
enjoyed a strong recovery as many investors considered it to
be oversold. In addition, it became apparent that early market Resolution Capital Cohen & Steers Capital
Limited 57.28% Management, Inc. 26.09%
concerns relating to tenants’ ability to honour their rental
obligations may have been overestimated and most sectors
received payment from the vast majority of the lessees.
Contributors to performance
• Appropriate allocations to retail in all geographies
added value.
• Overweight allocations to the outperforming US market
added value.
Detractors from performance
• Unhedged currency allocations were detrimental due to
the strengthening of the AUD v USD dollar exchange rate.
Property – Direct^ Allocation by property type3
Comments SA Commercial Core 3.1%
VIC Industrial 15.0%
The Australian direct property portfolio performed reasonably
well and generated a positive return due to its high occupancy NSW Commercial
Core Plus 32.7% VIC Commercial Core
rate, resilient rental income stream and minimal exposure to 28.7%
the retail sector.
VIC Commercial Core Plus
Contributors to performance NSW Commercial Core 4.1%
9.1%
• The numerous COVID-19 related rental relief requests NSW Industrial 7.3%
have been well managed, resulting in strong cash flow
in comparison to the broader market.
Detractors from performance
• Minor vacancies detracted value.
15
^ Exposure via the IOOF MIM Property Plus FundIOOF Investments Snapshot | June 2020
MultiMix wholesale single sector trusts
Alternatives and Defensive Equities
Alternative – Growth Investment manager allocation3
Comments Cash and short-term securities
6.4%
Performance was weak in global unlisted markets reflecting
the valuation lags of 3 to 6 months. In addition, the currency Hedge Fund 15.5%
Private Equity
appreciated by slightly over 11%. The benchmark still performed 78.1%
well despite this, with the very strong rebound in global share
markets. A complicated picture to dissect.
Contributors to performance
• Several private equity managers, including MLC, had good
results with asset sales completed.
Detractors from performance
• Energy private equity managers were hurt by the influences
mentioned above but also declining oil prices this half year.
• Hedge funds continue to disappoint.
Alternative – Defensive Investment manager allocation3
Comments Cash and short-term securities 3.0%
Currency appreciation hurt a number of our US-based managers Hedge Fund 3.8%
and overall performance.
Contributors to performance Real Assets 37.3%
• Private debt managers achieved performance at benchmark
levels. Private Debt 55.8%
Detractors from performance
• As mentioned, US managers particularly those with energy
exposure were significant underperformers.
• Infrastructure was slightly below benchmark.
Defensive Equities Investment manager allocation3
Comments
There were no changes to the portfolio.
IOOF Investment
Services Ltd 3.11%
Contributors to performance AllianceBernstein
Investment Management
• Plato outperformed due to positive stock selection in Lazard Asset
Management
Australia Limited
37.24%
Pacific Co 30.36%
Financials and Healthcare.
Plato Investment
Detractors from performance Management
Limited 27.32%
• Invesco income fund underperformed the broader equity Invesco 1.96%
index primarily due to challenging stock selection in the
Financials and IT sectors.
16IOOF Investments Snapshot | June 2020
IOOF MultiMix diversified trusts
IOOF MultiMix Capital Stable IOOF MultiMix Conservative
Performance2 Performance2
3 6 1 2 3 5 7 3 6 1 2 3 5 7
mths mths year year year year year mths mths year year year year year
% % % % % % % % % % % % % %
pa pa pa pa pa pa pa pa
Distribution 3.29 3.19 4.18 4.30 4.03 4.59 4.82 Distribution 4.00 3.88 4.90 4.97 5.16 6.14 6.33
Growth 0.32 -2.61 -1.71 -0.15 0.11 -0.13 0.02 Growth -1.15 -3.97 -2.59 -0.85 -0.60 -1.33 -0.77
Total 3.61 0.58 2.47 4.15 4.14 4.46 4.84 Total 2.85 -0.08 2.31 4.12 4.56 4.81 5.56
Benchmark 2.30 0.95 2.51 4.42 4.19 4.18 4.65 Benchmark 3.61 -0.22 2.20 4.80 4.98 5.05 5.82
Comments Comments
Western Asset Management was appointed to the fixed Western Asset Management was appointed to the fixed
interest portfolio in June 2020 to manage a multi-asset credit interest portfolio in June 2020 to manage a multi-asset credit
fund. Infrastructure Capital Group was appointed to the fund. Infrastructure Capital Group was appointed to the
Alternative Defensive portfolio in May 2020. Alternative Defensive portfolio in May 2020.
Contributors and Detractors Contributors and Detractors
Contributors to performance Contributors to performance
• Diversified fixed interest portfolio outperformed, with all • Diversified fixed interest portfolio was the main
underlying managers outperforming their benchmarks. contributor to performance, with all underlying managers
Managers with credit exposure like Western Asset, Stone outperforming their respective benchmarks. Managers
Harbor and Bentham, and active duration managers like with credit exposure like Western Asset, Stone Harbor and
Brandywine and T. Rowe Price were strong contributors. Bentham, and active duration managers like Brandywine
and T. Rowe Price were strong contributors.
• An overweight to Australian equities contributed.
Detractors from performance
Detractors from performance
• Alternative Defensive portfolio underperformed its fixed
• Alternative Defensive portfolio underperformed its fixed interest benchmark due to the rise of the Australian dollar,
interest benchmark due to the rise of the Australian dollar, as the portfolio is predominantly unhedged.
as the portfolio is predominantly unhedged. • Defensive equities portfolio underperformed in a
• Defensive equities portfolio underperformed in a strong market.
strong market.
Actual versus target allocation Actual versus target allocation
60 50
50
40
40
30
30
20
20
10
10
0 0
Australian International Property Alternative – Diversified Cash and Australian International Property Alternative – Alternative – Diversified Cash and
shares shares defensive fixed short-term shares shares growth defensive fixed short-term
interest securities interest securities
Actual allocation Target allocation Defensive Actual allocation Target allocation Defensive
17IOOF Investments Snapshot | June 2020
IOOF MultiMix diversified trusts
IOOF MultiMix Moderate IOOF MultiMix Balanced Growth
Performance2 Performance2
3 6 1 2 3 5 7 3 6 1 2 3 5 7
mths mths year year year year year mths mths year year year year year
% % % % % % % % % % % % % %
pa pa pa pa pa pa pa pa
Distribution 4.14 3.89 4.99 5.51 6.09 7.29 6.25 Distribution 5.57 5.12 6.41 7.09 8.89 11.43 9.32
Growth 0.01 -6.14 -3.69 -1.43 -0.64 -1.62 0.55 Growth -0.18 -8.17 -4.29 -2.19 -2.01 -4.60 -0.94
Total 4.15 -2.25 1.30 4.08 5.45 5.67 6.80 Total 5.39 -3.05 2.12 4.90 6.88 6.84 8.38
Benchmark 6.36 -2.48 1.27 5.16 6.18 6.28 7.60 Benchmark 8.08 -4.22 0.37 4.90 6.63 6.79 8.45
Comments Comments
Western Asset Management was appointed to the fixed Western Asset Management was appointed to the fixed
interest portfolio in June 2020 to manage a multi-asset credit interest portfolio in June 2020 to manage a multi-asset credit
fund. Infrastructure Capital Group was appointed to the fund. Infrastructure Capital Group was appointed to the
Alternative Defensive portfolio in May 2020. Alternative Defensive portfolio in May 2020.
Contributors and Detractors Contributors and Detractors
Contributors to performance Contributors to performance
• Diversified fixed interest portfolio outperformed, with all • Diversified fixed interest portfolio outperformed, with all
underlying managers outperforming their benchmarks. underlying managers outperforming their benchmarks.
Managers with credit exposure like Western Asset, Stone Managers with credit exposure like Western Asset, Stone
Harbor and Bentham, and active duration managers like Harbor and Bentham and active duration managers like
Brandywine and T. Rowe Price were strong contributors. Brandywine and T. Rowe Price were strong contributors.
Detractors from performance Detractors from performance
• Alternative portfolios underperformed their respective • Alternative portfolios underperformed their respective
benchmarks due to the rise of the Australian dollar, as the benchmarks due to the rise of the Australian dollar, as the
portfolios are predominantly unhedged. portfolios are predominantly unhedged.
• Defensive equities portfolio underperformed in a • A lower hedge ratio compared to benchmark detracted
strong market. from performance as the Australian dollar strengthened
over the quarter.
Actual versus target allocation Actual versus target allocation
35 30
30 25
25
20
20
15
15
10
10
5 5
0 0
Australian International Property Alternative – Alternative – Diversified Cash and Australian International Property Alternative – Alternative – Diversified Cash and
shares shares growth defensive fixed short-term shares shares growth defensive fixed short-term
interest securities interest securities
18 Actual allocation Target allocation Defensive Actual allocation Target allocationIOOF Investments Snapshot | June 2020
MySuper fund
IOOF MultiMix Growth IOOF Balanced Investor
Performance2 Performance2
3 6 1 2 3 5 7 3 6 1 2 3 5 7
mths mths year year year year year mths mths year year year year year
% % % % % % % % % % % % % %
pa pa pa pa pa pa pa pa
Distribution 5.91 5.27 6.57 7.71 10.02 12.31 10.35 Distribution 0.00 0.00 0.00 0.00 0.00 1.73 na
Growth 0.80 -9.98 -5.16 -3.07 -2.67 -4.82 -0.88 Growth 6.68 -3.57 0.62 4.60 6.34 4.79 na
Total 6.71 -4.70 1.41 4.64 7.35 7.48 9.46 Total 6.68 -3.57 0.62 4.60 6.34 6.51 na
Benchmark 9.74 -6.00 -0.54 4.58 7.06 7.29 9.30 Benchmark 6.81 -3.32 0.63 4.83 6.33 6.54 na
Comments Comments
Western Asset Management was appointed to the fixed Western Asset Management was appointed to the fixed
interest portfolio in June 2020 to manage a multi-asset credit interest portfolio in May 2020 to manage a multi-asset credit
fund. Infrastructure Capital Group was appointed to the fund. Goldman Sachs multi-factor strategy was replaced with
Alternative Defensive portfolio in May 2020. Challenger Index Plus in the international equities portfolio in
June 2020.
Contributors and Detractors
Contributors to performance Contributors and Detractors
• Australian equities portfolio performed well due to an Contributors to performance
overweight to small- and micro-caps which outperformed • Diversified fixed interest portfolio outperformed, with all
the broader market. underlying managers outperforming their benchmarks.
• Diversified fixed interest portfolio also contributed to Brandywine, Invesco and Janus Henderson performed
performance, with all underlying managers outperforming particular well. Of note, Stone Harbor emerging market
their benchmarks. debt strategy returned in excess of 16%.
Detractors from performance • Alternatives portfolio also outperformed, with solid
performance from private debt manager, Metrics.
• Alternative portfolios underperformed their respective
benchmarks due to the rise of the Australian dollar, as the
Detractors from performance
portfolios are predominantly unhedged.
• A lower hedge ratio compared to benchmark detracted • International equities portfolio underperformed as a result
of underperformance from TT International, Alphinity and
from performance as the Australian dollar strengthened
Goldman Sachs multi-factor strategy.
over the quarter.
Actual versus target allocation Actual versus target allocation
40 30
35
25
30
20
25
20 15
15
10
10
5
5
0 0
Australian International Property Alternative – Alternative – Diversified Cash and Australian International Property Alternatives Diversified Cash and
shares shares growth defensive fixed short-term shares shares fixed short-term
interest securities interest securities
Actual allocation Target allocation Actual allocation Target allocation 19Notes to the Snapshot
1. The actual management costs (and total management costs) are subject to change from time to time and may vary from the estimated management costs detailed
in the applicable PDS’ depending on changes to the Trusts’ underlying assets, changes to underlying investment managers and their fees, if any performance-related
fees are incurred (where applicable) and where any unusual or non-recurrent expenses are incurred or changes to other related expenses.
2. Performance is net of management costs and expenses. Performance is based on exit price to exit price for the period and assumes that all distributions are
reinvested. Management costs and other expenses are accounted for in the exit price. Past performance is not a reliable indicator of future performance.
Full details of the benchmarks used are provided in the relevant Trusts’ PDS.
3. Allocations may not sum to 100% due to rounding.
Important information
This document is issued by IOOF Investment Services Ltd (IISL) ABN 80 007 350 405, AFSL 230703, as Responsible Entity of the IOOF MultiSeries, IOOF MultiMix Trusts, IOOF
Balanced Investor Trust, IOOF Cash Management Trust and the MultiMix Wholesale Trusts. IISL is a company within the IOOF group which consists of IOOF Holdings Ltd
ABN 49 100 103 722 and its related bodies corporate. The information provided is of a general nature and is not tailored to any particular investor’s personal circumstances.
Accordingly, reliance should not be placed by anyone on the information in this document as the basis for making any investment decision. Before acting on the information
WMA-21427 (50596) 0720
in this document, investors should consider the appropriateness of the information having regard to their personal objectives, financial situation and needs and should
consult their financial adviser.
Before you acquire a financial product, you should obtain and consider the Product Disclosure Statement available from us at www.ioof.com.au, by calling 1800 002 217 or from
your financial adviser. The information in this document is current as at 6 August 2020. While this information is believed to be accurate and reliable at the time of publication,
to the extent permitted by law, no liability is accepted for any loss or damage as a result of reliance upon it. Neither IISL nor any company in the IOOF group guarantees the
performance of any fund or the return of an investor’s capital. Past performance is not an indicator of future performance.You can also read
