Time to rethink investment strategies: Western Asset
Advisers may be missing out of alpha returns by adopting passive benchmark tracking investment strategies, research reveals.
In a white paper fix-income manager, Western Asset Management, warned advisers that they need to take a more active approach with their investment strategies in the current uncertain climate.
Western Asset head of Melbourne operations and investment management, Anthony Kirkham, said the paper recommended using long-only active strategies, that have the potential to offer alpha returns.
"Central bank rate cuts, quantitative easing, a subdued global recovery and low inflation have left global bond yields at near-record lows," he said.
"Against this background, a more flexible active approach can provide the latitude needed to best position this ‘defensive' asset class, which acts as a ballast to risk assets such as equities.
"Unconstrained fixed-income strategies seek to achieve their objectives during both bullish and bearish bond environments, by rotating between government and spread sectors as well as managing duration, yield curve and volatility.
"Unconstrained is all about being nimble, responding to macroeconomic forces and seizing opportunities.
"It's not something fixed-income has always been known for, but unconstrained funds are now becoming an important part of the mix because of their responsiveness."
Recommended for you
Franklin Templeton has announced it will close its Australian Core Plus Bond Fund, having changed two fixed income funds in its Brandywine range last week.
Investment solution provider Channel Capital has appointed James Archer as its latest distribution director, joining from Pinnacle Investment Management.
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
