Emilio Gonzalez speaks at the Morningstar Annual Investment Conference 29 April 2010
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effective 2 November 2009

(APIR: RFA0028AU, ARSN: 097 575 730)

Since the termination of the BT Global Return Fund (Fund), the assets in the Fund are being realised in an orderly manner and the proceeds distributed to investors in the form of capital returns as quickly as is reasonably possible. The Fund is no longer being managed in accordance with its original investment objective. However, BTIM has regularly monitored and considered whether it remains practicable to maintain the Fund’s currency hedging program.

BTIM has now determined that it is in the best interests of unitholders to discontinue the currency hedging program, effective 2 November 2009 as this will allow a quicker return of capital to investors as well as removing uncertainty around the ability to maintain the hedging strategy.

Allows quicker return of capital to investors

The currency hedging program requires high cash levels (capital which could otherwise be returned to unitholders) to be retained within the Fund as a Foreign Exchange (FX) Reserve. This FX Reserve is maintained to cover any realised hedge losses.

The FX Reserve may be required to be replenished during the wind down period, which would result in future settlement amounts received by the Fund being held back rather than made available to unitholders as a return of capital. Removal of the hedging program will permit the cash in the FX Reserve to be returned to unitholders in late November 2009 and will prevent delays to the repayment of future settlement amounts.

Removes uncertainty surrounding the ability to maintain the hedging strategy

The current hedging strategy will be difficult to maintain with any certainty throughout the wind down period due to the less liquid nature of the Fund’s remaining investments. There is a risk that exchange rate changes may cause the currency hedging to be terminated as the FX Reserve maybe insufficient to offset further hedge losses. To prevent this, the FX Reserve would need to be increased, which would not be in line with the main objective of returning capital to investors as quickly as is reasonably possible.

How this affects unitholders

The cash currently held in the Fund as a reserve for currency hedging purposes will be distributed to unitholders as an additional part of the next quarterly distribution of capital in late November 2009.

Note that discontinuing the Fund’s foreign currency hedging strategy will introduce foreign exchange rate risk to unitholders’ remaining investment in the Fund from the effective date. This means that an appreciation of the Australian dollar relative to the US dollar may negatively impact the remaining investment’s value and returns, which from that date will be denominated in US dollars, while a depreciation of the Australian dollar may have a positive impact.