Industry superannuation fund, Rest has awarded a mandate to fixed income manager Payden and Rygel’s Payden Absolute Return Investment (PARI) strategy to form part of the fund’s overall portfolio.
The strategy will be represented by Grant Samuel Funds Management (GSFM) who’s head of institutional business, Charles Levinge, said the key focus of PARI was downside risk protection.
The strategy has low correlation to equities, bonds and mainstream credit and aims to limit volatility and outperform the Bloomberg AusBond Bank Bill Index by 2% to 3% by using a multi-sector, absolute return fixed income approach.
“The central pillar of the strategy is income generated from a highly diversified and rigorously vetted portfolio of global bonds. This stream of income provides the foundation from which the team adds shorter-term tactical views,” Levinge said.
“Risk management is also key to the strategy’s investment philosophy. It relies heavily on the team of analysts and strategists to thoroughly understand the entities in which they invest and determine sectors that provide the most risk-adjusted value opportunities.”
PARI also uses ‘smart yield’ which seeks to capture income from front-end maturity fixed income, with an emphasis on the steepest portfolios of global yield curves by investing in quality names that have a high probability of ultimate pay-off.