Global fixed interest fund launched
Aurora Funds Management has released an absolute return fund to provide investors with access to the global fixed income markets.
Although the Aurora Absolute Return Fund is currently only available to institutional investors, Aurora director Richard Matthews said it was likely it would be made available to retail clients within the next 12 months.
Matthews said the fund would suit investors who were looking for asset diversification and low volatility through exposure via global bonds using a long-short unlevered strategy.
The fund will be managed by the London-based fixed income team of Julius Baer Investments.
Julius Baer first vice-president Ronny Beck said the fund would invest in a range of asset classes including yield enhanced assets such as corporate bonds and emerging markets debt, and derivative instruments such as credit default swaps, on top of core holding of government bonds and cash.
“What we’ve tried to do is generate positive absolute returns over the medium term by actively managing yield curve, duration, currency, sector and credit allocations,” he said.
Beck said the fund had a performance target of between two and three per cent above the three-month bank bill swap rate, which was approximately the same as the cash rate. Risk will be managed according to total value at risk, with a maximum of 2.5 per cent per month set as the limit.
However, Beck noted that when the product is released to retail investors, the risk tolerance may be increased as retail investors typically had a larger appetite for risk than institutional investors.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
