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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 specific to investments in fixed income instruments may include:

  • credit and default risk (the value of the Fund's investments may be sensitive to changes to credit spreads and/or default due to a deterioration in a bond issuers ability to repay debt)
  • 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