We aim to deliver on clients’ objectives by actively positioning portfolios to consistently add value in a risk efficient manner. In pursuit of this goal, we draw on global insights to construct portfolios that balance risk through diverse sources of investment returns.
Australian Fixed Income – active management for higher yield
- An active manager in the Australian Fixed Income space that seeks to add value through the broad range of opportunities that exist in domestic bond markets
- Balanced risk approach to fixed income ensures diversification of investment opportunities
- Unconstrained idea-based investing, supported by strong quality controls and measurement
- Collaboration with specialists across the broader Global Fixed Income team through the Investment Opinion Network platform
Why Australian Fixed Income
Our Australian Fixed Income team has deep market expertise and employs a flexible approach to achieve clients’ objectives through both active and passive strategies. Supported by a large and well-resourced global fixed income capability, we seek to balance the active risk profile and incorporate global opportunities where appropriate to maximise risk adjusted returns.
How we do it
The Australian Fixed Income strategy is based on a balanced risk approach. We actively manage each of the key sources of potential investment value in the local market, and complement with global insights where appropriate. By seeking to ensure that portfolios are built in a balanced and diversified manner—where one particular view does not dominate—we believe we increase the likelihood of accomplishing portfolio objectives.
This philosophy is applied to multiple strategies to deliver on diverse client needs, including: core active, inflation-linked, passive and asset-liability management strategies.
We believe that unconstrained idea-based investing has a variety of advantages over conventional approaches. Ideas that are independent of an overarching view can be evaluated and communicated in real-time, they are measurable even when not used in the portfolio, and they are globally transportable for other strategies through our fixed income platform; the Investment Opinion Network (ION).
Assessment of environmental, social and governance factors in the Australian Fixed Income sector is incorporated in internal credit ratings assigned through our credit research process. This rating is used to assess relative value when compared to other issuers.
Long-term, repeatable investment performance sought through quality controls that are applied to each element of the investment process. Portfolio construction and monitoring processes ensure alignment with portfolio objectives.
Led by Stephen Cooper, we consist of seven specialists based in Sydney with an average of 17 years of industry experience.
We draw on the wealth of knowledge and resources from specialists across our fixed income capabilities. Over 50 experienced professionals are employed in major markets including New York, London, Hong Kong and Sydney.
The team was initially part of the Colonial First State business, which merged with the credit investment strategy from Commonwealth Investment Management when Commonwealth Bank of Australia acquired Colonial Group in 2000.
Our corporate RI strategy is based upon three strategic pillars of quality, stewardship and engagement.
In the Australian fixed income space, the Environmental, Social and Governance (ESG) assessment most often comes through its impact on the internal rating provided by the Credit Analysts via our Credit Research process. The portfolio management team then use this to assess relative value when compared to other similarly rated issuers. For example, ESG considerations in the automotive industry have led to our internal rating for some issuers being lower than that of the external rating agencies. As a result, the risk-reward assessment has often been decided such that we are underweight that sector in our active Australian fixed income portfolios.
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