Page 1 - Private Wealth Specialist Growth SMA (Moderate) PDF Factsheet

SMA Portfolio Change

Specialist Growth SMA (Moderate)

As at 26 November 2024

Following a review of your portfolio, we have recently made the following changes:

Rebalance

We continue to have conviction in the target weights of our portfolio (i.e. growth/defensive position
and allocation to each investment class).
Market movements have however resulted in a shift in the actual weights of some of the investment
options moving significantly from the target weight.

In light of this, we have rebalanced some of the holdings in your portfolio, taking profits from some of
your holdings that have performed well and re-allocating the funds to holdings that have lagged and
are below our target weight.

Investment Changes

We have also made the following changes to the investment options in your portfolio:
Sell ActiveX Ardea Real Outcome Bond ETF

Following a period of ongoing review, we haven’t been able to retain the requisite conviction in Ardea
Real Outcome to retain it in the portfolios. Whilst returns have been below expectations, the lower
conviction is a result of both people and process. The manager has seen quite a few senior departures
over the last few years. We raised some process concerns a little while ago which the manager
acknowledged and was working towards rectifying. But the regular updates we’ve received since
haven’t shown much in the way of progress and the manager hasn’t done a good enough job
explaining the process they’ve gone through.

Buy Franklin Australian Absolute Return Bond ETF (FRAR)

The ETF provides exposure to Australian fixed interest, complemented by a suite of global exposures
across currency, duration, investment grade and high yield corporate debt. The Fund employs a
flexible mandate which is defensive by nature and an investment process that draws on the ‘best
ideas’ from across Franklin Templeton’s global fixed income network. The Fund employs an
opportunistic and trading-orientated investment approach that seeks to deliver absolute returns
across a market cycle. This is achieved by constructing a portfolio of uncorrelated trades, which are
designed to deliver returns across different time horizons in an effort to produce a consistent return
profile. Potential sources of value-add includes interest rates (duration), currencies, sovereign credit,
corporate/spread sectors and bottom-up security selection. The team sticks to government and
strong non-government entity issues with attractive real yields and liquidity rarely venturing below
investment grade. Macro positioning of the Fund is the responsibility of the Australian-based
investment team.