POWERED BY MOMENTUM MEDIA
Time to revisit fixed interest
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.
AUTHOR
Mike Taylor
Recommended for you
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.
As institutional investors grapple with shifting sentiment towards US equities and fresh uncertainty surrounding tariffs, Australia’s Aware Super is sticking to a disciplined, diversified playbook.
Market volatility continued to weigh on fund returns last month, with persistent uncertainty making it difficult to pinpoint how returns will fare in April.
The Association of Superannuation Funds of Australia (ASFA) has called for the incoming government to prioritise “certainty and stability” when it comes to super policy.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
90.28 3 y p.a(%)
2
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.44 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
