Investment Process

Antares Fixed Income Investment Process

Antares Fixed Income believes that debt markets are not completely efficient and, as such, opportunities can be identified and exploited in a systematic way. Risks in fixed income markets are asymmetric and portfolios are constructed to capture income whilst minimizing the risk of capital loss.

Superior returns for a given level of risk can be delivered by investing in a broad set of opportunities and using a diversified range of strategies. Antares Fixed Income seeks to maximise returns across a range of economic cycles.

Antares Fixed Income retains a stable, collaborative and experienced team of investment professionals, who have managed investment portfolios across a range of economic cycles.

Our Process

Antares Fixed Income covers a range of fixed interest instruments across the risk spectrum, including sovereign debt, bank bills, corporate bonds, hybrid securities, private debt and derivatives.

Antares Fixed Income’s core investment process:

• Maximises running yield without compromising capital preservation;
• Focuses on fundamental and qualitative research;
• Performs deep research on individual securities;
• Considers technical and quantitative analysis; and
• Understands illiquidity and how to take advantage of it.

Antares Fixed Income seeks to make tilts away from the benchmark, enhancing returns through a combination of core and tactical strategies. Core strategies consist primarily of credit selection and running yield maximisation, while tactical strategies focus on duration, yield curve and spread positions.

Our Capabilities

Antares Fixed Income manages client monies across a broad spectrum of fixed income sectors as outlined below, including funds under management in each of the strategies. These strategies can be accessed via a discrete mandate, a pooled vehicle or both.

Cash ($3.37 billion)

• Core low risk Australian Cash strategy
• Strong focus on capital preservation
• High liquidity
• Benchmark: UBS Bank Bill Index

Enhanced Cash ($1.65 billion)

• Utilise diversified return seeking strategies
• Exploit structurally attractive opportunities at front end of the yield curve
• Excess return target (35 basis points p.a), Risk (15-30 basis points p.a)
• Benchmark: UBS Bank Bill Index

Short Duration - Fixed Interest ($1.9 billion)

• Focus on income generation and capital preservation
• Exploit structurally attractive opportunities at front/mid part of the yield curve
• Excess return target (25-35 basis points p.a), Risk (15-25 basis points p.a)
• Benchmarks: UBS 0-3 years or 0-5 years Composite Index

Long Duration - Index Enhanced Fixed Interest ($0.15 billion)

• Utilise diversified return seeking strategies
• Yield Curve positioning across broad market a key source of value add
• Risk tightly controlled with focus on capital preservation and income
• Excess return target (20-30 basis points p.a), Risk (10-20 basis points p.a)
• Benchmark: UBS All Maturities Composite Index

Long Duration – Core Fixed Interest ($1.6 billion)

• Diversified fixed interest strategies
• Credit Overlay utilised
• Excess return target (25-75 basis points p.a), Risk (20-70 basis points p.a)
• Benchmark: UBS All Maturities Composite Index

Australian Inflation Linked Bonds ($1.26 billion)

• Focus on the trade-off between real and nominal bonds
• Long experience with asset class
• Provide a hedge against Australian inflation
• Excess return target (25-75 basis points p.a), Risk (20-70 basis points p.a)
• Benchmark: UBS All Inflation Index

Asset / Liability Management ($3.0 billion)

• Immunising liabilities by matching key risks (cashflows, duration, convexity) with fixed income and/or inflation linked assets across all term structures
• Liability profile matching is first objective with the option to use return seeking strategies
• Proprietary modelling software enables appropriate assets and derivatives to be matched to key liability risks
• Benchmark: Liability aware and determined by client

Note: FUM as at 30 June 2010