Clearly active approach to fixed income pays off

Strong performance coupled with the ability to meet clients’ risk and return objectives has helped the Legg Mason Western Asset Australian Bond Fund win in the Australian Fixed Income category at this year’s Money Management/Lonsec Fund Manager of the Year Awards.

Western Asset Management’s head of Australian fixed income, Anthony Kirkham said the success of the fund should also be put down to its highly experienced team, which has been together for a long time, with the average experience in the industry of over 20 years. This enabled the fund to deliver such a positive performance.

“The big part of that is obviously how we manage money, which is clearly an active approach to fixed income,” he said. “When you look at our investment philosophy, which is long-term fundamental value with multiple diversified strategies, I think it’s what really paid off.”

For nominee PIMCO Diversified Fixed Interest Fund – Wholesale Class, it was the fund’s time-tested investment process, which combined an informed global macroeconomic outlook with robust bottom-up analysis in order to create the unique strategy.

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PIMCO’s head of the global portfolio management desk, Sachin Gupta, said: “Our philosophy is designed to add value in all market environments, taking measured risks across multiple strategies in a diversified manner.”

“Unlike most peers in this category, we take positions across a range of risk factors in a diversified manner so as not to over-concentrate client assets into specific market risks and to deliver consistent outperformance over long periods of time,” he said.

The Macquarie Australian Fixed Interest Fund’s senior portfolio manager, David Ashton attributed the success of his fund to the ability to deliver consistent alpha and a differentiated approach relative to peers.

The fund’s investment philosophy for managing fixed income focused on three areas including downside protection, value liquidity in the portfolio, and deep fundamental analysis.

“Our approach is different as we focus on using multiple low-risk and high information ratio strategies, and constantly adapt these strategies to take advantage of market inefficiencies. This tends to increase the reliability and consistency of returns relative to more traditional approaches,” he said.

“We are a global fixed income manager with experts on the ground in Sydney, London and Philadelphia. This means our clients have access to a large, experienced and stable team of fixed-income experts across the full spectrum of global and domestic fixed income capabilities. Our investment philosophy and processes are based on deep market and quantitative research, offering clients insights on key topics which impact them, and shape fixed-income markets.”