MLC enhances debt securities strategy
MLC has made changes to the debt securities strategy in the MLC Horizon portfolios and the MLC Diversified Debt Fund to improve flexibility and diversification, following a review focused on the management of interest rate and credit risk.
The changes are intended to increase MLC’s ability to deliver a more stable return on debt investments, while still focusing on preserving capital when returns from growth assets are weak. The revised debt strategy is expected to perform a more defensive role in a diversified portfolio, MLC said.
As part of the changes, MLC has defined the debt sectors more narrowly by dividing some existing sectors into a number of more specialised ones, while increasing flexibility to alter the allocations to debt sectors in response to market conditions.
"These changes are designed to ensure our debt strategies provide diversification when our investors need it most — during periods of weak share markets," said debt portfolio manager at MLC Investment Management Stuart Piper.
“These changes are intended to give us greater control over our exposure to interest rate and credit risk, more flexibility to respond to changes in market conditions, and increased diversification and specialisation across our managers,” he said.
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