Active management helped guide the Legg Mason Western Asset Australian Bond A fund during challenging market conditions, which has won the Money Management Fund Manager of the Year award for Australian Fixed Income.
Anthony Kirkham, head of investment management/head of Australian operations for Western Asset Management, said although the fund underperformed the benchmark during March and April, primarily due to an overweight in corporate credit, the strategy recovered ground in May and June.
“The strategy has recovered ground quickly in May and June with the portfolio positioned to take advantage of potential spread contraction as well as tactically trading around what we see as a range bound markets for yields,” Kirkham said.
Kirkham said the overweight to credit ahead of the COVID-19 pandemic was focused on short-dated credit.
“This was initially impacted by the liquidity drain that impacted all markets but once the market normalised this was quick to revert in most cases,” Kirkham said.
“At the same time, and during the dysfunction, we took the opportunity to lean into credit in names that we felt had been unduly impacted relative to its fundamentals, particularly in the infrastructure and utility sectors, and selectively within REITS [real estate investment trusts].
“This has also been a...