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MySuper to drive fixed interest demand
The development of MySuper funds seeking to set up target date funds will continue to drive demand for fixed interest products, according to Henderson Global Investors (HGI) head of distribution Matt Gaden.
Gaden said a number of MySuper funds looking at setting up target date funds for people aged 55 and above were actively seeking strategies to generate income within those funds.
"As these people move down the equities exposure curve they will move into fixed interest, not just in retirement but in the accumulation phase as well. The demand is growing for absolute return and fixed interest as people seek to immunise their bond strategies and set target dates for their investments," Gaden said.
HGI will offer a global fixed interest fund to retail, mezzanine and institutional investors as the group prepares to expand its Australian footprint from early 2014 onwards.
Gaden said the first fund to be rolled out would be a high conviction global equity fund, followed by the global fixed interest fund managed from the UK by HGI head of interest rate strategy Phil Apel, who said demand for fixed interest would continue to be driven by events in the United States and Europe.
"The search for yield and income is a global theme and will be more forceful in Europe than the US as the latter sees yields from equities lift while Europe continues to cut interest rates," Apel said.
"Fixed interest strategies have found their time and as equities return we expect interest to ebb and flow, but the focus will be on the diversification and returns offered by fixed interest."
HGI is not a new figure in the Australian funds management market, having first been introduced to investors via an alliance with AMP in the mid-1990s. Gaden said that relationship had ended a number of years ago. HGI was operating in the local market as a standalone listed entity and had recently been granted an Australian Financial Services Licence.
It had re-entered the local market in 2012 as a specialist global strategy manager, with former Colonial First State and Challenger executive Rob Adams heading HGI in Australia.
AUTHOR
Jason Spits
Jason has been writing on financial services since 1999 and has worked for on a number of trade media titles in both a full time and freelance capacity. He joined Money Management and Super Review in 2013 in the role of Senior Journalist.
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