Zenith reviews fixed interest sector
Zenith Investment Partners has published a list of 13 recommended fixed interest funds after conducting a review of the sector in the second half of 2008 during market volatility that “savaged” fixed interest investors.
“Given the divergence of performance of funds in this sector, we have revisited the risk and return drivers of all the funds we have reviewed as part of this sector review. In addition to the risk/return factors we assessed last year, we have placed a stronger emphasis on liquidity, income and foreign exchange hedging rates,” said Zenith associate director Ben Davis.
Strategic asset allocations must be correct if the appropriate investments were to be matched to the right risk/return objectives and timeframe of investors, Davis said.
The fall in the Australian dollar exposed the currency hedging process of some managers and impacted the income distribution of income funds, he said.
Credit market valuations look attractive to longer term investors if they are prepared to weather short term volatility, he added, while funds with exposure to credit markets were “attractive” on a running yield basis.
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