Tyndall Asset Management will establish an international fixed interest fund to be managed locally.
Tyndall already offers an offshore bond investment to internal clients via the Tyndall International Bond Fund. The fund is made up of the JP Morgan Government Bond Index (ex-Australia) and has exposure to about 17 countries. Delivered out of JP Morgan’s head offices, the fund has about $120 million under management.
“It is not a large fund but big enough for internal clients. We can use it as our launching pad and then build from there,” says Tyndall executive bond manager, Ross Gustafson.
But the overseas-managed international fixed interest fund is too passive for Tyndall’s taste.
“It is a bit passive, which we don’t like,” Gustafson says.
The traditionally defensive area of fixed interest should be managed actively in order to “squeeze extra out of it,” Gustafson says, and he believes the fixed interest fund could perform better if managed domestically.
Admitting it is still early days, Gustafson says the fund will have a progressive introduction. He says Tyndall is currently in the first and second stages of a five stage approach to setting up the domestically managed, offshore fixed interest fund, to be known as the Tyndall Diversified Bond Fund.
At the initial stage for the wholesale market, the fund has been launched to internal clients with a mix of 50 per cent Australian and 50 per cent international fixed interest investments. The next stage, Gustafson says, is the ability to tilt the exposure weightings.
“The next step will be the financial engineering, for example the derivatives,” he says.
A retail offering is also on the cards, to be made available through Tyndall’s master trust and wrap.
“Through the master trust sector, the fund will be available for retail to pick what they want from it,” he says.
