Reliable income remains a key priority for investors and retirees. But with low interest rates and low market volatility, the search for yield is challenging in today’s market. A new solution allows investors to achieve steady income with lower risk.
Challenger has partnered with global asset manager Standard Life Investments to launch the Challenger Absolute Return Global Bond Strategies Fund (the Fund). A new addition to Challenger’s range of retirement products, the Fund offers investors a reliable source of income, regardless of market cycles. The Fund uses credit, government bonds, currencies and derivative strategies aiming to diversify the portfolio and deliver positive returns in all market conditions.
The Fund implements between 20 and 30 investment positions at a time and has no directional bias, meaning that it can add value whether rates are rising or falling.
For example, the Fund can exploit changes in relative value between bonds across countries by buying bonds in countries where they are cheap and selling them in countries where they are expensive. The returns will be based on the relative movement of the two bond markets, so the strategy can generate a positive return irrespective of the overall direction of markets.
This approach means the Fund achieves genuine diversification and reduced portfolio volatility, with low correlation to traditional fixed income and equity funds.
The Fund also suits the income-layering approach to investing in retirement; held within the market-linked component of a portfolio, the Fund can provide additional steady income alongside the Age Pension and guaranteed income products.
By using an absolute return approach to investing, the Fund allows investors to continue to grow their portfolio with a controlled allocation to risk, both before and after they retire.
To learn more about the Fund and register for a live webinar visit challenger.com.au/CARGBS
The information is provided by Fidante Partners Limited (ABN 94 002 835 592 AFSL 234668) (Fidante Partners), Responsible Entity of, and the issuer of units in, the Challenger Absolute Return Global Bond Strategies Fund (the Fund). Standard Life Investments Limited (Standard Life Investments) (ABN 36 142 665 227), incorporated in Scotland (No. SC123321), is the investment manager of the Fund. This is general information only and is not intended to be advice. Clients should consider the Challenger Absolute Return Global Bond Strategies Fund product disclosure statement available at www.challenger.com.au before making any investment decisions.