NOW TRADING ON THE ASXAMP CAPITAL DYNAMIC MARKETS FUND (HEDGE FUND) ASX: DMKTA COST-EFFECTIVE ACTIVE EXCHANGE TRADED MANAGED FUND THAT SEEKS TO NAVIGATE THE UPS ANDDOWNS OF THE MARKET CYCLE

31 October 2016
Fund performance – as at 31 October 2016

A flexible approach to asset allocation

Inception Date: 15 July 2016

The Fund provides the potential for an improved risk-returnoutcome at a lower cost relative to a traditional diversified fund. Byseeking to provide a return of 4.5% pa above inflation, rather thanoutperforming a market index, the Fund aims to provide aninvestment outcome which more closely matches the needs of theinvestor.

Investment approach
The Fund adopts AMP Capital’s dynamic asset allocation
investment approach which aims to negotiate the ups and downsof the market cycle. The dynamic asset allocation approachinvests with the principal aim of achieving growth with smootherreturns over the longer term.

Notes:>>>“Fund” refers to the AMP Capital Dynamic Markets Fund (Hedge Fund)
ASX: DMKT.
“Unlisted Fund” refers to the non-exchange traded AMP Capital Dynamic
Markets Fund (on Platform Class A) – inception date 28 September 2011.
Performance of the Unlisted Fund is shown to illustrate how a comparable
AMP Capital managed fund using the same strategy has performed overlonger time periods. Fund and Unlisted Fund performance may vary due todifferences such as market making activities and inflows/outflows.

Benchmark: 4.5% pa above inflation
Management costs: 0.48%pa plus recoverable expenses and possible
performance fee (15.375% of performance above benchmark)
%

1 mth

3 mth

6 mth

1 yr

3 yr

InceptTotal return – after fees

0.20

0.80

n/an/an/a

0.54

Distribution

0.00

n/an/an/an/an/aGrowth0.00

n/an/an/an/a0.54

Benchmark

0.54

1.66

n/an/an/a

1.83

Past performance is not a reliable indicator of future performance.
Please note that performance for the Fund is less than 1 year and should not be
relied on as indicative of future performance. This performance report is prepared
for information purposes and not promotional purposes.

Historical performance of the Unlisted Fund - as at 31 Oct 2016%

6 mth1 yr

3 yr

InceptTotal return – after fees

2.09

-3.50

4.74

7.72

Benchmark

2.33

-3.04

5.45

8.36

Past performance is not a reliable indicator of future performance.
Performance is annualised for periods greater than one year. All total returns arecalculated using the net asset value per unit for the relevant month end. This price
may differ from the actual unit price for an investor buying or selling aninvestment. All returns quoted are before tax, after fees and costs and assume all
distributions are reinvested. Historic performance of the Unlisted Fund is not a reliableindicator of the performance of the Fund.

For more information visit ampcapital.com.au/funds

Historical asset allocation movements (Unlisted Fund)

How the Fund has performed•

The Fund delivered a positive return but underperformed theCPI + 4.5% objective in October.

•

Since inception of the strategy, the Fund has exceeded theCPI + 4.5% objective.

•

The main asset changes in October were to close theallocation to Emerging Market bonds and increase allocation
to Japanese shares.

•We continue to expect there will be market volatility and a
period of consolidation after the strong rally. The end of theyear tends to be a seasonally strong period for shares.

Fund asset allocation – GrowthFund asset allocation – Defensive
Current % Range %Current % Range %Australian shares

14.77

0-50

Australian sovereign bonds

3.110-25

International shares - developed and emerging*

41.05

0-50

Global sovereign bonds*

0.00

0-25

Global REITs*

0.00

0-25

Global credit (investment grade)*

0.00

0-25
0-25

Global credit (high yield)*

2.95

0-25

Global inflation linked bonds*

5.00

Commodities*

10.43

0-25Cash

22.69

0-50

Total - Growth Assets

69.20

0-90

Total - Defensive Assets

30.80

10-100*A$ hedged*A$ hedged

AMP CAPITAL  AMP CAPITAL DYNAMIC MARKETS FUND (HEDGE FUND) ASX: DMKT> AMP CAPITAL DYNAMIC MARKETS FUND (HEDGE FUND) ASX: DMKTWhat we believe the signals are saying, and what this means for the Fund’s asset allocation
The Fund aims to capitalise on opportunities in the market by adopting a ‘dynamic’ approach to asset allocation. We do this byanalysing a broad range of signals for each asset class, then allocating to asset classes according to where we are in the market andeconomic cycles, and according to the expected risk and reward over the medium term.
In favour

On watch

NegativeEquities

Listed property

Fixed income

Commodities

Valuation signals
Determine whether an asset class is overvalued, undervalued orfairly priced.
Despite some worries around absolute valuations, relative valuations remain attractive for equities compared to bonds as the gap between
earnings yields and bond yields remains wide (though beginning to narrow on the back of rising bond yields.)
Cycle signals
Determine which stage we are at in the business cycle.
Despite recession fears, economic indicators continue to point to moderate global growth.
Liquidity signals
Assess monetary conditions in different countries.
Liquidity conditions remain favourable for equities, with global interest rates low and quantitative easing programs in place in Japan and Europe, as
well as dovish behaviour from central banks around the world. The prospect of more rate hikes by the Fed than the markets expects is a risk.
Sentiment signals
Identify ‘herd’ behaviour among investors.
Investor sentiment has retreated towards neutral levels given the uncertainty and risk around certain events such as the US Presidential election.
Technical signals
Identify if markets are overbought or oversold.
Technical signals have seen improvements in trend across different markets, as well being supported by positive market breadth.
ResultFavourable

Neutral

Negative

Favourable

Commentary
Amid uncertainty leading up to the US Presidential election, the Fund retained option protection to provide a significant cushion against
any material market declines. The Fund also retains a relatively high cash allocation (of over 20%) as a defensive asset class. Cashalso enables the Fund to take advantage of opportunities that may arise out of any market weakness. The team will look closely forsigns of markets becoming more attractive from a valuation perspective, sentiment reaching bearish extremes and markets becoming
oversold through the DAA process. Event-risks other than the US election remain that must be closely monitored including the Italianreferendum and the prospect of Fed rate hikes.

.

Investment objective
The Fund aims to provide a total return (income and capital growth) before costs and before tax, of 4.5% pa above inflation - the Reserve
Bank of Australia inflation rate (Consumer Price Index) – trimmed mean (published on www.rba.gov.au) - on a rolling 5 year basis.
FACTS
Fund size$11.86 million

ExchangeASX

Minimum suggested time frame

5 years

ASX Code

DMKT

Distribution frequency

Half yearlyCurrency

AUD

Date of last distribution

N/ATrading

10:00 - 16:00 (AEST)

Distribution cents per unit

N/A

Bloomberg CodeDMKT AU

Issuer & Responsible EntityBetaShares Capital Ltd

IRESS Code

DMKT.AXW

Investment Manager

AMP Capital Investors Limited

iNAV IRESS CodeDMKTINAV.ETF

FOR MORE INFORMATION
If you would like to know more about how AMP Capital can help you, please visit ampcapital.com.au
Important note: This document has been prepared by AMP Capital Investors Ltd (ABN 59 001 777 591, AFSL 232497) (“AMP Capital”). BetaShares Capital Ltd (ACN 139 566 868, AFSL
341181 ("BetaShares") is the responsible entity and the issuer of units in the Fund. AMP Capital is the investment manager of the Fund and has been appointed by the responsible entity toprovide investment management and associated services in respect of the Fund. Investors should consider the Product Disclosure Statement (PDS) for the AMP CAPITAL DYNAMIC
MARKETS FUND (HEDGE FUND) before making any decision regarding the Fund. The PDS contains important information about investing in the Fund and it is important investors readthe PDS before making a decision about whether to acquire, continue to hold or dispose of units in the Fund. Neither BetaShares, AMP Capital, nor any other company in the AMP Groupguarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this document. Past performance is not a reliable indicator of future
performance. While every care has been taken in the preparation of this document, neither BetaShares nor AMP Capital makes any representation or warranty as to the accuracy orcompleteness of any statement in it including, without limitation, any forecasts. This fact sheet has been prepared for the purpose of providing general information, without taking account ofany particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of the information in this fact sheet,and seek professional advice, having regard to their objectives, financial situation and needs.