Schroders launches fixed income fund
Schroders Investment Management Australiahas unveiled a new fixed income fund aiming to provide investors with non-traditional methods of income generation in an environment of rising interest rates.
The Schroder Fixed Income Fund Wholesale Class, which is accessible to retail investors via theBTandMacquariewraps, will target investors “seeking higher risk and higher return asset classes to deliver their required yield, but also avoid the capital losses associated with bond funds in the event of interest rate hikes,” says Schroder director Greg Cooper.
The fund will also be included on theINGOneAnswer wrap when it updates the platform's product offerings listing in March.
“It is our belief that traditional fixed income portfolios generally follow closely the asset allocation of the main local and global indices rather than being built to address the primary reasons why investors hold fixed income assets.
“Schroders has established the fund to provide investors with the opportunity to invest in a portfolio of defensive assets that better matches the trade-offs most investors have to make between liquidity, duration, diversification, absolute risk and credit risk," the fund prospectus says.
According to Cooper consultants and financial planners are starting to move away from traditional bond funds as their source of income for clients, and this offering will assist them in doing so as it provides an alternative to clients deriving income by anchoring the core of their portfolio, in favour of seeking income from a variety of uncorrelated sources.
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Jason Spits
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