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Fixed income, yield remain in demand

SMSFs will continue to seek fixed income and yield for some time, according to BT Investment Management (BTIM).

“SMSF investors are getting a lot of their equity directly and the challenge is how they can get an income into their SMSF, while at the same time trying to get through a reliable source with low volatility,” BTIM chief executive Emilio Gonzalez told selfmanagedsuper.

“I still think fixed income and yield will be a priority.

“Obviously hybrids have been an important tool, especially in the past, but they’ve come under some pressure with banks having to raise capital.

“But the thirst for yield and the thirst for income, I don’t think has gone away, particularly as [interest] rates remain low and markets remain low for some time to come.”

In January, Gonzalez revealed the group was continuing to invest in its SMSF strategy via the private client and high net worth individual channels.

“It’s going quite well,” he said.

“We’re now starting to receive flows in some of our fixed income products through that channel, which we haven’t had in the past.

“We only put our intention for that in the last year and a half and already we’ve had some of our products on approved lists and platforms, so that’s started to generate flows into our products.

“The onus and responsibility on the product providers to [design] products that are in some ways tailored to the requirements of a direct investor is still an important criteria to that segment of the market, otherwise if you try and be too broad, you’re missing the mark.”

He revealed the group was still working on its ideas for product offerings next year.

Last month, BTIM reported its full-year results, announcing an increase of $12 billion in funds under management to $78.4 billion as at 30 September.

Cash net profit after tax (NPAT) reached $132.5 million and statutory NPAT hit $126.4 million, both increasing by 4 per cent.

Underpinning that result was strong growth in base management fees and record net inflows, reflecting the strength and diversity of the business, the group said.

In June last year, Gonzalez revealed to selfmanagedsuper the company would concentrate on product offerings specifically for the SMSF market.

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