Australian Fixed Income (inc. Diversified)
Henderson Australian Fixed Interest Fund
Legg Mason Western Asset Australian Bond Trust – Class A
PIMCO Diversified Fixed Interest Fund – Wholesale Class
Overweight allocation to investment grade corporate debt as well as asset-backed securities and active management of interest rates were the two key strategies that drove the performance of the Henderson Australian Fixed Interest Fund and gave the fund its second win in a row in the Australian Fixed Income category.
According to Henderson Global Investors’ head of Australian fixed interest, Glenn Feben, the fund exhibited defensive attributes and had historically demonstrated a low or negative correlation to growth assets, especially during periods of stress.
He also said that the fund’s “high-quality nature of the underlying assets” was a key attribute of its defensive properties.
“Additionally, the fund is managed by one of Australia’s most stable and experienced debt specialist teams, which should provide comfort that the fund is being managed conservatively, with a focus on capital preservation and is true-to-label as a high-quality, defensive fixed interest solution for our investors,” Feben said.
Speaking about the fund’s outlook for the coming year, he said: “The year ahead presents some real challenges and uncertainties given the potential for political developments to influence investor confidence”.
“We continue to hold a defensive bias toward interest rate risk, maintain an allocation to inflation protected securities and adopt a more cautious approach to managing credit risk,” he said.
Finalist, Legg Mason, followed the “tried and tested investment philosophy” that spans more than 45 years for its Western Asset Australian Bond Trust – Class A.
Western Asset Management head of investment management, Anthony Kirkham said: “We apply a genuine team approach that utilises our best ideas with integrated risk management that is designed to meet the objectives of our investors. Applying a diversified approach to positions and using an appropriate and efficient risk budgeting approach has delivered consistent above benchmark returns over a long-term period, regardless of the market environment”.
For PIMCO’s Diversified Fixed Fund – Wholesale Class, the most crucial strategy for success was its ability to offer investors “a unique opportunity to access the $100 trillion global bond market”, but also retain a strategic allocation toward domestic high-quality opportunities.
The fund’s portfolio manager, Robert Mead, said: “This allows the strategy to hit a sweet spot amongst investors who want a strategic actively risk-managed allocation to both Australian and global fixed interest markets”.