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The aim of the Fund is to actively manage a portfolio of Australian money market and fixed interest securities (with certain risk mitigation measures implemented) to generate a return over a full market cycle which exceeds that delivered by the Bloomberg AusBond 0-3 Year or 0-5 year Composite Bond Index.

Inception date January 2004 (although separate mandates have been managed via this style since the mid 1990s)
Benchmark Bloomberg AusBond 0-3 Year or 0-5 year Composite Bond Index
Management fee Negotiable
Performance fee Nil
Buy/Sell spread Nil
Minimum investment Negotiable
Investment approach
  • We believe debt markets are not efficient and can be systematically exploited, to extract positive returns, within an active management process that includes risk mitigation measures.
  • We are a ‘top-down’ driven manager employing a scenario based methodology that is combined with a robust risk management process.
  • Strategies are targeted at optimal risk/return opportunities and designed to exploit structurally attractive opportunities at the front/mid part of the yield curve.
  • Credit strategies combine our ‘top-down’ macro view with focused ‘bottom-up’ credit analysis.
  • Sophisticated in-house analytics drive yield curve strategies; the “rolldown” element in yield curves is a key source of excess returns.
  • Focus is on income maximisation utilising a diverse range of fixed interest strategies. We believe credit, yield curves and portfolio construction provide the greatest risk/return opportunities and are the key drivers of excess returns. The Fund employs a cautious approach to interest rate risk with duration limited to within 6 months of the benchmark’s duration.
  • All security investments are rated with minimum ratings of A3(Short Term) or BBB- (Long Term) as rated by Standard & Poors;
  • Core and tactical investment strategies are used to generate excess returns for the portfolio and minimise market volatility;
  • The Fund utilises various risk mitigation strategies, such as interest rate and credit derivatives, to protect against adverse market risks.
Risks Risks specific to investments in fixed income instruments may include credit and default risk (ie  the risk that the issuer of security owned by the relevant Fund may not meet their obligations to make interest payments, the repayment of capital or both), interest rate risk (the value of the relevant Fund’s investments may be sensitive to changes to interest rates), inflation risk (the risk of inflation being higher than anticipated), and liquidity risk (the risk of not being able to find a buyer in a timely manner).
Portfolio Manager

Mark Kiely

Portfolio Manager