UBS Global Asset Managementhas taken out theMoney Management/AssirtFund Manager of the Year award for the Australian fixed interest category, beating finalistsIOOFandColonial First State.
The win is the result of a proven process, but Assirt head of research Caroline Saunders says UBS “is also very strong on the fee side of things relative to other managers, has had consistent performance and also refines its process on an annual basis”.
The award relates to the $650 million UBS Bond Fund, which returned 10.55 per cent for the year ending March 31 after being up 46 basis points over the period, according to UBS Asia Pacific head of fixed income Stuart Piper.
The UBS Bond Fund aims to source alpha from all traditional avenues of active return using both interest rate management and sector/issue selection, Piper says.
“Seventy-five per cent of the alpha [10.55 per cent] came from interest rate management and 25 per cent came from sector management and issue selection.
“What we offer in our strategy is a combination of sourcing alpha from all of the traditional sources of return from a bond portfolio.
“This includes interest rate management, which covers both duration and yield curves, and then you’ve got sector/issue selection, which includes government, semi-government and corporate issues,” he says.
Piper adds that UBS’ process is very rigorous and formal, and is combined with a timing overlay to implement strategy at the best market price.
“I believe this gives us consistency in performance because we are able to see through the noise in the market and not get carried away with sentiment and essentially into making poor investment decisions,” he adds.
Piper says the strategy employed over the year was initially to go long in its duration on interest rates and then progressively through the year and into the March quarter shift to a short position on duration.
“Basically, we were long when rates were falling and short when rates were rising. On the sector selection issuance side, we were overweight in corporate bonds, and tended to be underweight on Government and semi Government issuances,” Piper says.
UBS has a number of analytical models to aid decision making, and also relies on the experience of its seven-member team.
