Fixed income for life?
Everyone knows Australians are living longer than ever before, and the Australian Bureau of Statistics (ABS) says life expectancies have increased (to 80.3 for men and 84.4 for women), but is there a fund that can last that long?
Only four out of the 459 fixed income funds on Money Management's Investment Centre (MMIC) and Financial Express, produced a return over eight per cent per annum over 10 years.
Meanwhile, 10 fund managers generated a return of 10 per cent or over in the last 12 months.
Russell Investment's global bond led the way and generated 17.44 per cent, followed by BT's classic investment BT global bond fund (with 12.04 per cent).
Fixed income managers who produced over 10 per cent this year
[[{"fid":"28050","view_mode":"default","fields":{"format":"default","field_file_image_alt_text[und][0][value]":"Fixed income managers who produced over 10 per cent this year ","field_file_image_title_text[und][0][value]":"Fixed income managers who produced over 10 per cent this year "},"type":"media","attributes":{"alt":"Fixed income managers who produced over 10 per cent this year ","title":"Fixed income managers who produced over 10 per cent this year ","style":"width: 731px; height: 200px;","class":"media-element file-default"}}]]
In terms of longer term returns, only 19 per cent of fixed income funds (86 funds) generated a return of five per cent per annum (or over), over the last 10 years.
If you upped your expectations and sought a seven per cent return (per annum) over 10 years, only five per cent of funds (25 funds) would have met your request.
However, if you bumped up your ante again, and wanted an eight per cent return (per annum) over 10 years, only four fixed income funds would have fit the bill.
Bentham's wholesale high yield fund was front and centre with 9.4 per cent, followed by PIMCO's global credit wholesale fund, followed by another two PIMCO funds.
Fixed income managers who produced over eight per cent p.a over 10 years
[[{"fid":"28052","view_mode":"default","fields":{"format":"default","field_file_image_alt_text[und][0][value]":"Fixed income managers who produced over eight per cent p.a over 10 years ","field_file_image_title_text[und][0][value]":"Fixed income managers who produced over eight per cent p.a over 10 years "},"type":"media","attributes":{"alt":"Fixed income managers who produced over eight per cent p.a over 10 years ","title":"Fixed income managers who produced over eight per cent p.a over 10 years ","style":"width: 827px; height: 100px;","class":"media-element file-default"}}]]
For more information about these funds or for our PIMCO fund manager video interview (available from Monday 11 July 2016), please visit http://investmentcentre.moneymanagement.com.au
Recommended for you
Franklin Templeton has announced it will close its Australian Core Plus Bond Fund, having changed two fixed income funds in its Brandywine range last week.
Investment solution provider Channel Capital has appointed James Archer as its latest distribution director, joining from Pinnacle Investment Management.
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
