PIMCO Australian Bond strategy earns golden rating
Morningstar has announced that the PIMCO Australian Bond fund has been the only fixed-interest strategy to earn the rating house’s highest possible analyst rating of gold, while another 21 funds were designated silver and further 21 funds have been recognised as bronze.
Morningstar said that falling Australian bond yields in 2018 allowed more-traditional Australian bond portfolios to surpass most other major asset classes, and the fixed-interest strategies fulfilled the portfolio insurance role.
At the same time, most flexible-bond vehicles were best deployed as a component rather than the entirety of a fixed-interest allocation, Morningstar said.
Two strategies, UBS Australian Bond and UBS Diversified Fixed Income, were upgraded to silver and bronze and Morningstar initiated the coverage of the following strategies:
- Legg Mason Western Asset Global Bond at bronze;
- Vanguard Global Aggregate Bond Index at bronze;
- Vanguard Global Aggregate Bond ETF at bronze;
- Vanguard Australian Government Bond Index at neutral; and
- CC JCB Active Bond at neutral.
The firm also said that credit spreads approached pre-financial crisis levels and active managers responded to that by moderating their sensitivity to this sector.
“Managers have several options to adjust their credit exposure, and no single metric can capture this shift easily,” Morningstar said in a press release.
“Over the course of 2018, bond managers trimmed allocations, moved into less cyclical sectors, favoured higher-grade paper, scaled the capital structure, shifted into shorter-dated instruments, and/or hedged credit allocations more aggressively.”
AUTHOR
Oksana Patron
Recommended for you
Flows into cash and fixed income ETFs soared in May, rising from $366 million in April to more than $1.3 billion, data from Betashares shows.
Quinbrook Infrastructure Partners has promoted its Australian head to the role of chief executive of the global investment manager.
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
