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 6 months ago
Kevin Gorman

Super director remuneration ...

1 year 6 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 6 months ago

Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”. ...

1 day 23 hours ago

The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members....

1 day 23 hours ago

Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financia...

1 day 23 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5