The two big superannuation schemes covering Commonwealth public servants — the Public Sector Superannuation Scheme (PSS) and the Commonwealth Superannuation Scheme (CSS) have appointed new fixed income managers ahead of what are seen to be more challenging times for bond markets.
The move, announced just before Easter, sees Delaware International Advisers, Blackrock Financial Management and Bridgewater Associates managing the funds’ active international fixed income allocations, while Wellington International Management and Loomis Sayles will continue to manage the PSS/CSS funds’ current allocation to international high yield debt within the asset class.
Explaining the move, PSS/CSS chief investment officer Andre Morony says the new manager line-up reflects a board decision to adopt the Lehman Global Aggregate benchmark instead of the Citigroup World Government Bond Index.
He says it also reflects a move to increase the actively-managed component of international fixed income, with the benchmark remaining fully hedged to the Australian dollar.
Morony says the new arrangements were implemented in consultation with the funds’ consultant, JANA Investment Advisers, and are designed to allow manager flexibility in what is perceived to be difficult times ahead for bond markets.
