Zenith completes fixed interest sector review
Zenith has completed its 2009 fixed-interest sector review, with 17 out of 95 funds rated ‘recommended’ or better.
Four new funds were added and two existing funds received upgrades. In total five funds were rated ‘highly recommended’ and 12 as ‘recommended’, consisting of six Australian and 11 international funds.
The changing bond landscape was likely to be one of the most important factors for fixed-income markets, according to Zenith investment analyst Steven Tang.
“Investors should be mindful of the changing composition of the bond indices and how this may affect their returns from fixed interest funds,” he said.
“Increasing government issuance will result in this sector representing a larger portion of the common indices used as benchmarks by a large portion of managers. Therefore, the more index-aware managers as well as passive investors will have a larger exposure to government bonds — irrespective of their views about the underlying issuers,” he said.
Many investors failed to participate in the rebound in risk assets in 2009 after moving all investments to cash, as the worst affected markets recovered most strongly, he said.
Funds with large exposures to corporate debt or structured securities highlighted the need for investors to maintain strategic weightings to take advantage of rebounds, he added. Tang warned that credit markets may yet experience another downturn despite strong support so far from governments.
AUTHOR
Mike Taylor
Recommended for you
After seven years at the company, Iress’ chief technology officer for wealth management APAC, Anthony Gerrits, has departed as the firm commences a search process to fill the role.
With advice firms thinking about scaling up in 2025, research has detailed the main avenues financial advisers say they have used for successful recruitment.
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
