Business News

Aust fixed income managers struggle to outperform

Research house Zenith Investments Partners’ recent review of the domestic fixed income market has found, despite a year of strong returns, few Australian fund managers operating in the space were able to outperform the index over the 12 months ending 30 April 2015.

Zenith’s “2015 Australian Fixed Interest Review” measured the managers it rated against the Bloomberg AusBond Composite Index and overall found the sector delivered an annual return of 8.91 per cent, mostly attributable to a rally in bonds and a tightening in credit spreads.

However, returns produced by the funds Zenith reviewed contained great disparity, with a large number of investment styles in play, according to Zenith head of multi-asset and income research Andrew Yap.

The researcher also found many Australian fixed income managers had reviewed their mandate tolerances as they looked to include global rate, curve and credit strategies.

In addition, the review found domestic managers were not averse to adding global allocations to their portfolios.

Among the Australian fixed income funds assessed, three were given a highly recommended rating, 24 a recommended rating and eight an approved rating.

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