Time to revisit fixed interest

27 July 2010
| By Mike |

Global consultancy Towers Watson has urged superannuation fund trustees to revisit their fixed interest allocations to ensure their configurations remain relevant.

In an analysis made public this week, Towers Watson said a prolonged period of inverted yield curves and tight credit spreads, followed by the global financial crisis and subsequent issues in global sovereign bond markets, had presented a challenging range of environments for fixed-income portfolios.

“If investors have not already done so, we believe that it is an appropriate time to revisit the objectives for this asset class and to ensure that portfolio and manager configurations remain fit for purpose,” the analysis said.

It said that trustees needed to consider more than just the percentage of their allocation towards bonds, and to also take account of duration and consequent exposure to risk factors.

On the question of active versus passive management, the Towers Watson analysis said there was no one-size-fits-all solution and that certain factors, including investor belief, comparative costs, complexity and fund size, had a large bearing on the issue.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year 4 months ago
Kevin Gorman

Super director remuneration ...

1 year 4 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year 4 months ago

A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets....

11 hours ago

While the latest quarterly CPI print exceeded expectations, most economists still anticipate a rate cut, especially amid growing downside risks to global growth stemming ...

11 hours ago

Earlier this month, several Australian superannuation funds fell victim to credential stuffing attacks, which saw a small number of members lose more than $500,000....

11 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND