For income as. as clockwork

Size: px
Start display at page:

Download "For income as. as clockwork"

Transcription

1 For income as as clockwork The aim of the AMP Capital Corporate Bond Fund is this to provide monthly income. It targets investment-grade corporate bonds, in Australian and global markets, to minimise risk and broaden opportunities. AMP Capital has the scale and relationships to find the best-priced bonds. Could your clients fixed income portfolio benefit? Learn more at ampcapital.com.au/clockwork Investors should consider the Product Disclosure Statement (PDS) available from AMP Capital Investors Limited (ABN , AFSL ) (AMP Capital) for the AMP Capital Corporate Bond Fund (Fund) before making any decision regarding the Fund. The PDS contains important information about investing in the Fund and it is important investors read the PDS before making a decision about whether to acquire, continue to hold or dispose of units in the Fund. AMP Capital Funds Management Limited (ABN , AFSL ) (AMPCFM) is the responsible entity of the Fund and the issuer of units in the Fund. Neither AMP Capital, nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this document. Past performance is not a reliable indicator of future performance. While every care has been taken in the preparation of this document, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This document has been prepared for the purpose of providing general information, without taking account of any particular investor s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of the information in this document, and seek professional advice, having regard to their objectives, financial situation and needs. ACI0109/FPC1/PP

2 IN FOCUS W hen planners look around the investment universe, the return outlook everywhere is grim. But fixed income is a particular problem. Yields on bonds and term deposits have slumped on the back of rate cuts and stimulus. If you invest now and interest rates rise, as many expect, you could face big capital losses. Many investors are chasing yield and Challenging conditions make investing in riskier hybrids. But planners it more important than ever and their clients don t have to take big for fixed-income investors to risks to get yield and income, even in have a clear objective. this environment. Ben Power reports. There are investment options, such as floating-rate notes, which have decent yields, but also protect against interestrate rises. Planners can also look at more complex managed options, including income and absolute return funds. And despite low yields, analysts urge planners not to forget bonds primary role: a portfolio diversifier. Don t give up on what traditional bond funds bring to the table, and why you have fixed income in the first place, says Tim Murphy, co-head of fund research at Morningstar Australasia. In this complex investing environment planners need to be clear about their objectives for fixed income. Are they seeking portfolio diversification, or are they looking to generate income? Going forward, it s all about separating those goals, says Simon Warner, head of macro markets, fixed income, at AMP Capital. One of the key roles of fixed income has been diversifying a portfolio: T1 5 : 0 7 : : always 0 0 when equities fall or crash, a flight to GETTING CREATIVE TO AVOID BIG RISKS ACI _ St r i p 1 _ PP - If your clients seek a regular monthly income, visit ampcapital.com.au/clockwork ACI0109/Strip1/PP

3 IN FOCUS THREE TYPES OF BONDS Issuer DBNGP Finance Corporation Pty Ltd Call/ maturity date Coupon type Capital structure Yield to maturity Running yield Capital price Face value Capital value 11/10/2019 Fixed Senior debt 5.80% 5.94% $10,000 $10,101 Stockland Trust 25/11/2020 Fixed Senior debt 5.40% 7.06% $10,000 $11,682 Downer Group Finance Pty Ltd 29/11/2018 Fixed Senior debt 5.75% 5.75% $10,000 $9,999 Genworth Financial Mortgage 30/06/2016 Floating Lower Tier 2 Vero Insurance Ltd 07/09/2015 Floating Lower Tier 2 DBCT Finance Pty Ltd (Dalrymple Bay) 5.69% 7.16% $10,000 $10, % 3.38% $10,000 $9,715 09/06/2021 Floating Senior debt 6.13% 3.18% $10,000 $9,049 Envestra Ltd 20/08/2025 ILB Senior debt 6.17% 3.24% $12,475 $11,688 Sydney Airport Finance 20/11/2020 ILB Senior debt 6.65% 3.86% $12,847 $12,498 $85,322 $85,307 Prices accurate as at 4 September 2013 and subject to change Minimum initial investment $50,000 Black = retail and wholesale investors, red = wholesale only ILB - Capital indexed bond, these are linked to inflation. FIIG assumes CPI of 2.5% per annum (the mid point of the RBA inflation target) YTM - Yield to maturity incorporates any capital gain or loss at maturity or first call plus interest payments, using the pricing provided Running yield - estimated interest income for the bond based on the above prices Source: FIIG Securities Floating-rate notes safety usually sees government bonds There has been a lot written about the rise. But with bond yields so low, and many prospect of a bond bubble bursting. The coupons on floating-rate notes are tied to a benchmark usually the bank-bill swap investors expecting rates to increase, some question whether bonds are in a position to play their traditional diversification/ As the global economy improves, bond yields will drift higher, Warner says. That s fine as long as it s in line with a rate plus a margin. So when official rates defensive role in a portfolio. better economy and improvements in the rise, the coupon rises in line with rates and Warner, who manages AMP Capital s value of risk assets such as equities. But the bond price remains stable. Australian Wholesale Bond Fund, says that we don t really believe there is a bubble in Moran says that it s important to hold all three types of bonds inflation-linked, last year those concerns were warranted. bonds about to be burst. fixed-rate and floating in a portfolio. But you d look at adding additional floating-rate notes if you thought we were at the bottom of the [interest rate] cycle, she says. The Vero Insurance Ltd floating-rate But after recent Australian government bond yield increases, valuations mean that, once again, bonds can play their defensive role. Yields on 10-year Australian government bonds are up about 100 basis points from their lows in the middle of last But Warner says that bond investors also need to be clear about which commentary relates to local bonds and which relates to international markets. He, and others, note that in Australia, upward pressure on bond yields is very limited. note, which matures in 2015, has a running year, when yields fell below 3 per cent. Australia continues to be soft, Warner yield of 3.38 per cent; but the Genworth That is much closer to fair value, says. It s reasonable to expect our economy Financial Mortgage floating-rate note, Warner says. Therefore, the prospects to underperform against what we re used which matures in 2016, has a running yield of 7.16 per cent. going forward are much better at this to as the mining boom peters out. We also AMP Capital s Warner agrees that floating-rate notes are a great idea if you re thinking about preserving income. If you re purely looking at bonds through the lens of income, it s important to be on the front end of the curve, he says. level of yield than if we were speaking last October or November. Central banks around the world have pushed yields to historic lows, and Warner says US bonds were never good value when they were yielding 2 per cent. US don t think there is a local bond bubble. But many retail investors are focused on fixed interest for income. They have been spoilt in past years with term deposits. But with rate cuts, those days are over. I wouldn t want to be in a lot of Warner says floating-rate notes are not a Federal Reserve chairman Ben Bernanke retirees shoes at the moment, says substitute for diversification, but are a good ACI 0109_St r i p2_pp - 1 has recently talked 09-16T15: about tapering 15: of 08+10: Elizabeth 00 Moran, director of education substitute for the likes of term deposits. quantitative easing, which would likely see bond yields rise. and fixed income research at FIIG, of the low-return environment. AMP Capital has a 40-year track record of fixed income investing. ACI0109/Strip2/PP

4 IN FOCUS AS THE GLOBAL ECONOMY IMPROVES, BOND YIELDS WILL DRIFT HIGHER. THAT S FINE AS LONG AS IT S IN LINE WITH A BETTER ECONOMY AND IMPROVEMENTS IN THE VALUE OF RISK ASSETS ACI _ St r i p 3 _ PP SIMON WARNER - 1 Jason Blumberg, senior investment analyst at van Eyk, says retail clients generally want steady income with capital protection: they want to earn around 5 to 6 per cent a year without losing their money. If investors are chasing income, his advice is to get out of government bonds, because rates are so low. There is only one direction for them to go [up], and you could end up getting quite hurt, he says. In the past few years, investors have substituted bonds with term deposits, he notes, while direct bond holdings have been focused on hybrid securities. But many analysts are now warning of the growing risks of hybrids particularly with recent issues, which have more terms and conditions that make them more equity-like. FIIG s Moran says hybrids do provide the yields investors are looking for. But I m not sure investors are factoring risk into the situation, she says. FIIG prefers older hybrid issues, which are less equity-like, from companies such as National Capital Instruments (a subsidiary of National Australia Bank), Rabobank, Swiss Re and AXA SA. else do investors turn? There T 1 5 : 1 1 : :So0where 0 are a number of options, particularly Today, we re among Asia s largest fixed income managers. See more at ampcapital.com.au/clockwork ACI0109/Strip3/PP

5 IN FOCUS floating-rate notes. Moran says there is probably not the opportunity to make big money in fixedrate bonds, as there has been in recent years. (Fixed-rate bond prices rise when interest rates fall; but they help investors meet expenses, and the income is known, as is the overall rate of return if they hold the bonds until maturity.) With so much money being printed around the world, Moran says it is also worth looking at inflation-linked bonds. She says if there is a spiking of growth, inflation could rise quickly. Hold some of those as protection, she says, adding that many are paying margins of 4 per cent over CPI. It s like getting TD [term deposit] rates with an inflation hedge, she says. In this environment, why wouldn t you do that? Sydney Airport Finance inflation-linked bonds, for example, have a running yield of 3.86 per cent. Moran notes that the running yield doesn t make any inflation assumption. The rate is They re pretty good at getting you that [5 to 6 per cent], Blumberg says of income funds. They re not going to give you massive double-digit returns, but they provide you with the stability most retail clients are looking for. Morningstar s Murphy also likes the Macquarie Opportunity Income Fund, along with the Perennial Tactical Income Trust. They have very experienced management and have been running mandates for a long time, he says. Murphy says many funds have created absolute return mandates in the last few years. They [Macquarie and Perennial] have been running money that way for a long period of time; it s not a new thing for them. The current market is particularly challenging for investors, with returns low across most asset classes, including fixed income. That means investors and advisers need to be crystal clear about what they re trying to achieve; and when it comes to income, advisers will also have to be more creative than they have been in the past when term deposits delivered strong returns. But there are options, particularly floating-rate notes. Investors will also have to be mindful that chasing yield means higher risk. paid on the growing face value of the bond. If quarterly inflation is 3 per cent, the face value would rise from $100 to $103 and the 3.86 per cent is paid on the new face value of $103. But with interest rates possibly rising, a major focus has been on floating-rate notes. (See box on p38.) Planners and their MARKET EXPECTATIONS OF FUTURE INTEREST RATES clients don t have to buy floating-rate notes directly. They can get Date 3-month bank bill 10 year Commonwealth exposure through certain income funds, including absolute swap rate (BBSW) (%) government bonds (%) return funds, which are growing in popularity. Blumberg says absolute return funds are good for the right type of investor, 3M though they do employ complicated strategies. 6M 2.58 n/a They re good if you re comfortable with hedge-fund type 1Y investments, he says. 2Y Absolute return funds are capable of getting investors closer to 3Y double-digit returns, Blumberg notes, but with extra risk. He likes, for example, the GAM Absolute Return Bond Fund. 4Y It has a good track record over time. It does use quite a few 5Y options strategies and long-short bond strategies, he says. 6Y Blumberg says income funds also have a role in this low-rate 7Y environment. He likes Kapstream Absolute Return Income Fund 8Y and the Macquarie Income Opportunity Fund. 9Y They re a really good alternative to term deposits if you re looking for a bit of a premium over cash, he says. 10Y Those funds invest in high-quality credit securities and 15Y short-term corporate debt used for funding working capital Source: Bloomberg, FIIG Securities Limited requirements, ACI 0109_St which is very r i p4_pp short-term and - therefore reduces 09- risk 16T15: 13: 38+10: 00 Rates as at 4 September 2013 particularly interest-rate risk. To take bond opportunities fast ACI0109/Strip4/PP

6 AMP Capital takes an agile approach Your clients want an investment vehicle that takes opportunities at speed. AMP Capital meets this demand. Our scale lets us process massive amounts of information to find the value. Our experience lets us access all types of bonds from major capital markets around the world. But it s our management approach that makes us nimble enough to seize new possibilities. See all we can do at ampcapital.com.au/clockwork or follow us on While every care has been taken in the preparation of this advertisement, AMP Capital Investors Limited (ABN ) (AFSL ) makes no representation or warranty as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This advertisement has been prepared for the purpose of providing general information, without taking into account of any particular investor s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this advertisement, and seek professional advice, having regard to the investor s objectives, financial situation and needs. ACI0109/FPC2/PP

DIRECT ACCESS TO Fixed Income

DIRECT ACCESS TO Fixed Income DIRECT ACCESS TO Fixed Income Buy and sell direct corporate bonds in $10,000* investment parcels Enjoy fast and seamless management of multiple term deposits FIIG DirectBonds Service FIIG s DirectBonds

More information

Spectrum Insights. Time to float. Why invest in corporate bonds? - Value

Spectrum Insights. Time to float. Why invest in corporate bonds? - Value Spectrum Insights Damien Wood, Principal JUNE 25, 2015 Time to float Investing in floating rate bonds as opposed to fixed rate bonds helps protect bond investors from price slumps. Spectrum expects that

More information

Direct Fixed Income Solutions with the Institutional Bank.

Direct Fixed Income Solutions with the Institutional Bank. Direct Fixed Income Solutions with the Institutional Bank. Westpac Institutional Bank Cash Tailored Term Deposits Fixed Income Direct fixed income solutions Direct fixed income solutions Westpac Institutional

More information

Investment Menu Retail Managed Accounts

Investment Menu Retail Managed Accounts Investment Menu Retail Managed Accounts IMPORTANT INFORMATION This Investment Menu is issued by Linear Asset Management Ltd (ABN 11 119 757 596, AFSL 304542) ( Responsible Entity we, our or us ), the responsible

More information

Preserve Wealth Harvest income Balance your Portfolio

Preserve Wealth Harvest income Balance your Portfolio Preserve Wealth Harvest income Balance your Portfolio L eaders in Yield and Income Our commitment to superior client service, and our consistent record of outperforming the major bond indices in both bull

More information

Investment insight. Fixed income the what, when, where, why and how TABLE 1: DIFFERENT TYPES OF FIXED INCOME SECURITIES. What is fixed income?

Investment insight. Fixed income the what, when, where, why and how TABLE 1: DIFFERENT TYPES OF FIXED INCOME SECURITIES. What is fixed income? Fixed income investments make up a large proportion of the investment universe and can form a significant part of a diversified portfolio but investors are often much less familiar with how fixed income

More information

Maximising income through bonds Elizabeth Moran Director of Education and Fixed Income Research

Maximising income through bonds Elizabeth Moran Director of Education and Fixed Income Research Maximising income through bonds Elizabeth Moran Director of Education and Fixed Income Research What is your portfolio allocation? Do you have enough defensive assets? Key considerations Income, given

More information

Spectrum Insights. Bond and stock market around the same size Australian bonds vs Australian stock market

Spectrum Insights. Bond and stock market around the same size Australian bonds vs Australian stock market Market capitalization $b Spectrum Insights Damien Wood, Principal JUNE 9, 2015 Corporate bonds often provides investors with an income stream that is above deposit rates, but less risky than dividends

More information

Morningstar Core Equities Portfolio

Morningstar Core Equities Portfolio Morningstar Core Equities Portfolio Managed Portfolio Disclosure Document for members dated 29/02/2016. The Portfolio Manager is Morningstar Australasia Pty Limited (ABN 95 090 665 544, AFSL 240892). Issued

More information

INVESTING YOUR SUPER. This document forms part of the NGS Super Member Guide (Product Disclosure Statement) dated 14 August 2015

INVESTING YOUR SUPER. This document forms part of the NGS Super Member Guide (Product Disclosure Statement) dated 14 August 2015 This document forms part of the NGS Super Member Guide (Product Disclosure Statement) dated 14 August 2015 INVESTING YOUR SUPER FACT SHEET 5 14 AUGUST 2015 NGS Super offers you flexibility and choice when

More information

Disclosure Document Morningstar High Growth Portfolio

Disclosure Document Morningstar High Growth Portfolio Disclosure Document Morningstar High Growth Portfolio Managed Portfolio Disclosure Document for investors investing through the IDPS operated by HUB24 Custodial Services Ltd (HUB24) dated 1 December 2015,

More information

Access Transparency Income Exchange Traded Bond Units

Access Transparency Income Exchange Traded Bond Units FIXED INCOME FOR ALL INVESTORS Access Transparency Income Exchange Traded Bond Units Exchange Traded Bond Units (XTBs) offer a new and exciting fixed income investment opportunity for all investors. XTBs

More information

Managed funds. Plain Talk Library

Managed funds. Plain Talk Library Plain Talk Library Contents Introduction to managed funds 5 What is a managed fund and how does it work? 6 Types of managed funds 12 What are the benefits of managed funds? 15 Choosing a managed fund

More information

Sources of return for hedged global bond funds

Sources of return for hedged global bond funds Research commentary Sources of return for hedged global bond funds August 2012 Author Roger McIntosh Executive summary. The recent results in key bond market indices demonstrate the importance of a strategic,

More information

1 JULY 2015. Investment Guide INDUSTRY, CORPORATE AND PERSONAL DIVISIONS

1 JULY 2015. Investment Guide INDUSTRY, CORPORATE AND PERSONAL DIVISIONS 1 JULY 2015 Investment Guide INDUSTRY, CORPORATE AND PERSONAL DIVISIONS Your investment choice TWUSUPER was established in 1984 as the Industry SuperFund for people in transport and logistics. By understanding

More information

Module 6 Fixed income ETFs

Module 6 Fixed income ETFs Module 6 Fixed income ETFs Course #: Title Topic 1: I want exposure to bonds... 3 What are bonds?... 3 The bond market is diverse... 3 Bond prices... 4 What makes a bond's price change?... 4 More information...

More information

PROTECTING YOUR PORTFOLIO WITH BONDS

PROTECTING YOUR PORTFOLIO WITH BONDS Your Global Investment Authority PROTECTING YOUR PORTFOLIO WITH BONDS Bond strategies for an evolving market Market uncertainty has left many investors wondering how to protect their portfolios during

More information

Our managed funds products are issued by

Our managed funds products are issued by Our managed funds products are issued by 1 According to the Investment and Financial Services Association 1, Australia s first managed funds were introduced in 1954. Since then the industry has grown substantially

More information

Changes to the Product Disclosure Statement for:

Changes to the Product Disclosure Statement for: Changes to the Product Disclosure Statement for: FirstChoice Investments FirstChoice Personal Super FirstChoice Pension New Product Disclosure Statement: Issue No. 2013/1, dated 11 June 2013 Old Product

More information

Understanding Fixed Income

Understanding Fixed Income Understanding Fixed Income 2014 AMP Capital Investors Limited ABN 59 001 777 591 AFSL 232497 Understanding Fixed Income About fixed income at AMP Capital Our global presence helps us deliver outstanding

More information

The Australian Guide to Fixed Income

The Australian Guide to Fixed Income The Australian Guide to Fixed Income Foreword by Ian Macfarlane AC Former Governor of the Reserve Bank of Australia 1996-2006 FIIG Securities Limited ABN 68 085 661 632 AFS Licence 224659 Foreword Ian

More information

INVESTMENT. OneAnswer Investment Portfolio. (only available to investors who joined prior to 1 July 2013) Product Disclosure Statement Product Book

INVESTMENT. OneAnswer Investment Portfolio. (only available to investors who joined prior to 1 July 2013) Product Disclosure Statement Product Book INVESTMENT OneAnswer Investment Portfolio (only available to investors who joined prior to 1 July 2013) Product Disclosure Statement Product Book 1 July 2014 OneAnswer Investment Portfolio Entity details

More information

Make sure your SMSF is.

Make sure your SMSF is. Make sure your SMSF is. Super decisions You know first-hand that one of the biggest advantages of managing your own super is that you make the decisions. It s one of the main reasons you have an SMSF or

More information

PUBLISHED: 12 Jan 2013 00:32:11 UPDATED: 12 Jan 2013 02:43:59PUBLISHED: 12 Jan 2013 PRINT EDITION: 12 Jan 2013

PUBLISHED: 12 Jan 2013 00:32:11 UPDATED: 12 Jan 2013 02:43:59PUBLISHED: 12 Jan 2013 PRINT EDITION: 12 Jan 2013 Sleep-easy assets in volatile times PUBLISHED: 12 Jan 2013 00:32:11 UPDATED: 12 Jan 2013 02:43:59PUBLISHED: 12 Jan 2013 PRINT EDITION: 12 Jan 2013 Tony Featherstone BetaShares Drew Corbett uses a buy-write

More information

Dimensional Short Term Fixed Interest Trust

Dimensional Short Term Fixed Interest Trust Dimensional Short Term Fixed Interest Trust PRODUCT DISCLOSURE STATEMENT Issued by DFA Australia Limited ( Dimensional ) ABN 46 065 937 671 APIR DFA0100AU Australian Financial Services Licence number:

More information

Opportunities and risks in credit. Michael Korber Head of Credit

Opportunities and risks in credit. Michael Korber Head of Credit Opportunities and risks in credit Michael Korber Head of Credit August 2009 Overview Fixed income assets, characteristics and risks Where the current opportunity is in fixed income markets How to access

More information

MLC MasterKey Unit Trust Product Disclosure Statement (PDS)

MLC MasterKey Unit Trust Product Disclosure Statement (PDS) MLC MasterKey Unit Trust Product Disclosure Statement (PDS) Preparation date 1 July 2014 Issued by MLC Investments Limited (MLC) ABN 30 002 641 661 AFSL 230705 This information is general and doesn t take

More information

OneAnswer. Investment Funds Guide

OneAnswer. Investment Funds Guide OneAnswer Investment Funds Guide July 0 Investment Portfolio The whole of this OneAnswer Investment Funds Guide forms Part Two of the Product Disclosure Statement (PDS) for: OneAnswer Frontier Investment

More information

Strategy enhancement Change in MLC s fixed income strategies

Strategy enhancement Change in MLC s fixed income strategies Strategy enhancement Change in s fixed income strategies May 2015 We ve added two new managers to our global absolute return strategy and capitalised on the strong performance from our global mortgages

More information

Elstree. Australian Super: Are SMSF s doing it better?

Elstree. Australian Super: Are SMSF s doing it better? Elstree Australian Super: Are SMSF s doing it better? 1 The tripling of superannuation assets means that superannuation is now larger than GDP and will probably surpass total bank assets within 4 years.

More information

Understanding Hybrid Securities. ASX. The Australian Marketplace

Understanding Hybrid Securities. ASX. The Australian Marketplace Understanding Hybrid Securities ASX. The Australian Marketplace Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain

More information

Understanding Bonds. ASX. The Australian Marketplace

Understanding Bonds. ASX. The Australian Marketplace Understanding Bonds ASX. The Australian Marketplace Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent

More information

Transaction costs (buy/sell spreads)

Transaction costs (buy/sell spreads) Transaction costs (buy/sell spreads) EFFECTIVE FROM DECEMBER 2013 Transaction costs, including brokerage, stamp duty, settlement and other costs, are incurred by a fund when buying and selling fund assets.

More information

PERPETUAL WEALTHFOCUS

PERPETUAL WEALTHFOCUS PERPETUAL WEALTHFOCUS Investment Book INVESTMENT BOOK Dated 17 April 2015 Issued by Perpetual Investment Management Limited ABN 18 000 866 535 AFSL 234426 Perpetual Superannuation Limited ABN 84 008 416

More information

Investment options and risk

Investment options and risk Investment options and risk Issued 1 July 2015 The information in this document forms part of the Product Disclosure Statement for the Public Sector Superannuation accumulation plan (PSSap), eighth edition,

More information

CALVERT UNCONSTRAINED BOND FUND A More Expansive Approach to Fixed-Income Investing

CALVERT UNCONSTRAINED BOND FUND A More Expansive Approach to Fixed-Income Investing CALVERT UNCONSTRAINED BOND FUND A More Expansive Approach to Fixed-Income Investing A Challenging Environment for Investors MOVING BEYOND TRADITIONAL FIXED-INCOME INVESTING ALONE For many advisors and

More information

A Case for Dividend Investing

A Case for Dividend Investing A Case for Dividend Investing Many investors may be surprised to learn that dividends paid by companies have accounted for 45% of the total return for Australian equities over the last 10 years 1. Buying

More information

The Fix Fixed income flashback: is history going to repeat?

The Fix Fixed income flashback: is history going to repeat? December 2014 For professional investors only The Fix Fixed income flashback: is history going to repeat? Kellie Wood, Portfolio Manager, Fixed Income Traditional financial theory portends that bond prices

More information

Chapter 12. Page 1. Bonds: Analysis and Strategy. Learning Objectives. INVESTMENTS: Analysis and Management Second Canadian Edition

Chapter 12. Page 1. Bonds: Analysis and Strategy. Learning Objectives. INVESTMENTS: Analysis and Management Second Canadian Edition INVESTMENTS: Analysis and Management Second Canadian Edition W. Sean Cleary Charles P. Jones Chapter 12 Bonds: Analysis and Strategy Learning Objectives Explain why investors buy bonds. Discuss major considerations

More information

AON MASTER TRUST. Introduction to investments. aonmastertrust.com.au

AON MASTER TRUST. Introduction to investments. aonmastertrust.com.au AON MASTER TRUST Introduction to investments aonmastertrust.com.au CONTENTS Risk versus return... 3 Asset classes... 4 Defensive and growth asset classes... 5 Asset class performance... 6 Managing risk...

More information

: Keeping an eye on corporate subordinated debt; Beating low interest rates

: Keeping an eye on corporate subordinated debt; Beating low interest rates Client Topic Source Date : GAM : Keeping an eye on corporate subordinated debt; Beating low interest rates : The Asset : March Issue Based on investment-grade companies, high income bond investing allows

More information

State Street Global Equity Fund ARSN 162 547 784 APIR SST0050AU

State Street Global Equity Fund ARSN 162 547 784 APIR SST0050AU Product Disclosure Statement State Street Global Equity Fund ARSN 162 547 784 APIR SST0050AU Issued 6 October 2015 by State Street Global Advisors, Australia Services Limited ABN 16 108 671 441, AFSL 274900

More information

Corporate bonds made simple

Corporate bonds made simple Corporate bonds made simple Foreword What is fixed income? Chapter 1: Why should you consider fixed income? Chapter 2: Fixed income features that you need to know Chapter 3: Fixed income products Chapter

More information

Transaction costs (buy/sell spreads)

Transaction costs (buy/sell spreads) Transaction costs (buy/sell spreads) EFFECTIVE FROM NOVEMBER 2014 Transaction costs, including brokerage, stamp duty, settlement and other costs, are incurred by a fund when buying and selling fund assets.

More information

Product Update and Continuous Disclosure Notice: Changes to OneAnswer s OnePath Alternatives Growth fund

Product Update and Continuous Disclosure Notice: Changes to OneAnswer s OnePath Alternatives Growth fund Product Update and Continuous Disclosure Notice: Changes to OneAnswer s OnePath Alternatives Growth fund SEPTEMBER 0 SEPTEMBER 0 Due to GMO the underlying fund manager no longer accepting additional money,

More information

Results Announcement for the half year ending 31 December 2013. Centuria Capital Limited Presentation to Investors and Analysts

Results Announcement for the half year ending 31 December 2013. Centuria Capital Limited Presentation to Investors and Analysts Results Announcement for the half year ending 31 December 2013 Centuria Capital Limited Presentation to Investors and Analysts Half year summary First half year performance in line with expectations Underlying

More information

Invest with confidence. Boosting income and preserving capital in retirement

Invest with confidence. Boosting income and preserving capital in retirement Invest with confidence Boosting income and preserving capital in retirement Australians have an income challenge As the cost of living continues to rise and retirement nears, you need more than ever to

More information

PROFESSIONAL FIXED-INCOME MANAGEMENT

PROFESSIONAL FIXED-INCOME MANAGEMENT MARCH 2014 PROFESSIONAL FIXED-INCOME MANAGEMENT A Strategy for Changing Markets EXECUTIVE SUMMARY The bond market has evolved in the past 30 years and become increasingly complex and volatile. Many investors

More information

www.statewide.com.au/join

www.statewide.com.au/join How we invest your money Employer-sponsored and personal superannuation members. This document was prepared on 3 August 2015. The information in this document forms part of the Statewide product disclosure

More information

With interest rates at historically low levels, and the U.S. economy showing continued strength,

With interest rates at historically low levels, and the U.S. economy showing continued strength, Managing Interest Rate Risk in Your Bond Holdings THE RIGHT STRATEGY MAY HELP FIXED INCOME PORTFOLIOS DURING PERIODS OF RISING INTEREST RATES. With interest rates at historically low levels, and the U.S.

More information

Investment options and risk

Investment options and risk Investment options and risk Issued 1 November 2013 The information in this document forms part of the Product Disclosure Statement for the Commonwealth Superannuation Scheme (CSS), sixth edition, issued

More information

The Rise and Rise of Interest Rate Securities

The Rise and Rise of Interest Rate Securities The Rise and Rise of Interest Rate Securities Nicholas Yaxley, Credit Research, Morningstar Australasia Agenda Outline the key drivers of primary issuance and whether they are still relevant How does

More information

Transaction costs (buy/sell spreads)

Transaction costs (buy/sell spreads) Transaction costs (buy/sell spreads) spreads) Effective from September 2015 Transaction costs, including brokerage, stamp duty, settlement and other costs, are incurred by a fund when buying and selling

More information

New super rates and limits

New super rates and limits AUSTRALIA POST SUPER SCHEME Insight News from the Australia Post Superannuation Scheme Quarter ending June 2014 New super rates and limits INSIDE THIS EDITION Investment results for the quarter and year

More information

THE CASE FOR REAL RETURN INVESTING

THE CASE FOR REAL RETURN INVESTING Perpetual Investments THE CASE FOR REAL RETURN INVESTING For many, the primary goal of investing is to accumulate sufficient assets to fund a comfortable retirement whether that s in 5 or 50 years time.

More information

An investor s guide to debt securities. NAB Income & Investment Solutions.

An investor s guide to debt securities. NAB Income & Investment Solutions. An investor s guide to debt securities. NAB Income & Investment Solutions. General advice warning Disclaimer: This document has been prepared by National Australia Bank Limited ABN 12 004 044 937 AFSL

More information

Your guide to Managed Funds.

Your guide to Managed Funds. Your guide to Managed Funds. An introduction to Managed Funds 1 Investing in Managed Funds 2 Key benefits 6 Risks 7 The Citibank advantage 8 About Citigold 11 An introduction to Managed Funds There s a

More information

Enhancements to ING s diversified investment funds

Enhancements to ING s diversified investment funds Enhancements to ING s diversified investment funds Effective 1 November 2005 Our investment managers, ING Investment Management Limited (INGIM), recently conducted a review of ING s diversified investment

More information

Investment Options and Risk

Investment Options and Risk Investment Options and Risk Issued 1 July 2013 The information in this document forms part of the Product Disclosure Statement for the Military Superannuation and Benefits Scheme (MilitarySuper), third

More information

Adviser Guide to the Select Multi-Asset Portfolios - Select Defensive and Select Growth Portfolios

Adviser Guide to the Select Multi-Asset Portfolios - Select Defensive and Select Growth Portfolios Adviser Guide to the Select Multi-Asset Portfolios - Select Defensive and Select Growth Portfolios Leading the way in multi-asset portfolios since 2002 Contents Why consider multi-asset portfolios? What

More information

9/30/81: 15.84% Real yield average: 2.46% Real 10-year Treasury yield 12/31/15: 0.25% -5% 58 63 68 73 78 83 88 93 98 03 08 13

9/30/81: 15.84% Real yield average: 2.46% Real 10-year Treasury yield 12/31/15: 0.25% -5% 58 63 68 73 78 83 88 93 98 03 08 13 NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE INVESTMENT INSIGHTS Building better fixed income portfolios 1Q 2016 PLEASE VISIT jpmorganfunds.com for access to all of our Insights publications. Get

More information

Essentials of Fixed Income

Essentials of Fixed Income Essentials of Fixed Income State Universities Retirement System April 2010 (This page left blank intentionally) Benefits of Fixed Income Main reasons to invest in fixed income: Diversification Return potential

More information

INVESTING IN NZ BONDS

INVESTING IN NZ BONDS INVESTING IN NZ BONDS August 2008 Summary Historically active NZ bond managers have achieved returns about 0.6% p.a., before tax and fees, above that of the NZ government stock index. While on the surface

More information

AMP Capital Investment Funds

AMP Capital Investment Funds AMP Capital Investment Funds Investment Statement Dated: 18 September 2015 Issued by AMP Investment Management (N.Z.) Limited Important information (The information in this section is required under the

More information

This document is a Fact Sheet for the Product Disclosure Statement dated 22 May 2010 for Flexible Lifetime - Super and Allocated Pension ( PDS ).

This document is a Fact Sheet for the Product Disclosure Statement dated 22 May 2010 for Flexible Lifetime - Super and Allocated Pension ( PDS ). Fact sheet 4 Fees and other costs This document is a Fact Sheet for the Product Disclosure Statement dated 22 May 2010 for Flexible Lifetime - Super and Allocated Pension ( PDS ). CONTENTS PAGE Taxation

More information

INTRODUCTION TO BETASHARES YIELD MAXIMISER FUNDS ASX CODE: YMAX (Australian Equities) & UMAX (US Equities)

INTRODUCTION TO BETASHARES YIELD MAXIMISER FUNDS ASX CODE: YMAX (Australian Equities) & UMAX (US Equities) ASX CODE: YMAX (Australian Equities) & UMAX (US Equities) www.betashares.com.au One of the more enduring investment themes in recent times has been the desire for income combined with less volatility.

More information

Bond Investing. Plain Talk Library

Bond Investing. Plain Talk Library Plain Talk Library Contents Introducing bonds 1 What is a bond? 1 Types of bonds 3 How do bonds work? 4 How interest rates affect bond prices 5 Investing in bonds 6 Bond credit ratings 9 What role do bonds

More information

OnePath investment solutions

OnePath investment solutions OnePath investment solutions Investing has evolved INVESTMENT About OnePath OnePath is one of Australia s leading providers of insurance, superannuation and investment solutions. We have been helping Australians

More information

Fixed Income Investing

Fixed Income Investing Fixed Income Investing Why Invest in Fixed Income Fixed income securities (bonds) are a fundamental part of an investing plan for most investors. There are many types of bonds along with varied approaches

More information

Banks Funding Costs and Lending Rates

Banks Funding Costs and Lending Rates Cameron Deans and Chris Stewart* Over the past year, lending rates and funding costs have both fallen in absolute terms but have risen relative to the cash rate. The rise in funding costs, relative to

More information

A Case for Investing in Fixed Income

A Case for Investing in Fixed Income A Case for Investing in Fixed Income Fixed income is considered a defensive asset class and is designed to achieve stable returns in the form of income, often with little or no capital growth. This is

More information

FIDUCIAN TECHNOLOGY FUND

FIDUCIAN TECHNOLOGY FUND PRODUCT DISCLOSURE STATEMENT FIDUCIAN TECHNOLOGY FUND ARSN 093 544 337 2 MARCH 2015 This Product Disclosure Statement (PDS) provides a summary of significant information about the Fiducian Technology Fund

More information

Investor Guide Wells Fargo Advantage Absolute Return Fund. Explore a nontraditional approach to asset allocation

Investor Guide Wells Fargo Advantage Absolute Return Fund. Explore a nontraditional approach to asset allocation Investor Guide Wells Fargo Advantage Absolute Return Fund Explore a nontraditional approach to asset allocation Is it time to consider a nontraditional approach to investing? The fund s strategy has allowed

More information

Absolute return: The search for positive returns in changing markets

Absolute return: The search for positive returns in changing markets Absolute return: The search for positive returns in changing markets Tuesday, 7 June 2011 Portfolio Manager for Global Fixed Income and Absolute Return Funds www.dbadvisors.com Topics for discussion What

More information

3 ways to maximise every dollar in your SMSF.

3 ways to maximise every dollar in your SMSF. 3 ways to maximise every dollar in your SMSF. We knowhow. Contents. Your super, your way. Once you ve established a Self Managed Super Fund, we have a three-piece DIY Super Solution to help you manage

More information

Are Unconstrained Bond Funds a Substitute for Core Bonds?

Are Unconstrained Bond Funds a Substitute for Core Bonds? TOPICS OF INTEREST Are Unconstrained Bond Funds a Substitute for Core Bonds? By Peter Wilamoski, Ph.D. Director of Economic Research Philip Schmitt, CIMA Senior Research Associate AUGUST 2014 The problem

More information

Investing in infrastructure?

Investing in infrastructure? Investing in infrastructure? Independent guide for investors about infrastructure investments This guide is for you, whether you re an experienced investor or just starting out. Key tips from ASIC about

More information

Economic & Market Outlook

Economic & Market Outlook Monthly Portfolio Commentary December 31, 2015 Economic & Market Outlook Stocks rebounded in 2015 s fourth quarter, but provided little reward for the year as a whole. The S&P 500 Index recovered from

More information

STATEMENT OF ADVICE GUIDANCE WORDING FOR TRADING

STATEMENT OF ADVICE GUIDANCE WORDING FOR TRADING COMMSEC ADVISER SERVICES JULY 2014 1 COMMSEC ADVISER SERVICES STATEMENT OF ADVICE GUIDANCE WORDING FOR TRADING STATEMENT OF ADVICE GUIDANCE WORDING FOR TRADING IMPORTANT INFORMATION This guidance wording

More information

NAB Income & Investment Solutions

NAB Income & Investment Solutions NAB Income & Investment Solutions Delivering diversified income investment solutions for investors and their advisers. FOR ADVISERS AND INVESTORS Delivering diversified income investment solutions for

More information

Fixed Income Guide. A guide for wholesale clients about the benefits of investing in fixed income.

Fixed Income Guide. A guide for wholesale clients about the benefits of investing in fixed income. Fixed Income Guide A guide for wholesale clients about the benefits of investing in fixed income. 2 Fixed Income Guide IMPORTANT INFORMATION This publication is for distribution to wholesale clients or

More information

Capital preservation strategy update

Capital preservation strategy update Client Education Summit 2012 Capital preservation strategy update Head of Institutional Fixed Income Investments, Americas October 9, 2012 Topics for discussion 1 Capital preservation strategies 2 3 4

More information

Understanding Fixed Income Returns: Past, Present and Future by Stephen Kroah,CFA

Understanding Fixed Income Returns: Past, Present and Future by Stephen Kroah,CFA Understanding Fixed Income Returns: Past, Present and Future by Stephen Kroah,CFA In today s economic environment, much discussion is centered around the impact of rising interest rates on fixed income

More information

Institutional Group Fixed Income for Nonprofits Strategies to consider in a rising rate, low return environment

Institutional Group Fixed Income for Nonprofits Strategies to consider in a rising rate, low return environment Institutional Group Fixed Income for Nonprofits Strategies to consider in a rising rate, low return environment Following over 30 years of a secular bull market in bonds, the recent sharp rise in interest

More information

Investment Guide. About this document. Contents. This document explains: Date of issue: 5 October 2015. mtaasuper.com.audate.

Investment Guide. About this document. Contents. This document explains: Date of issue: 5 October 2015. mtaasuper.com.audate. Investment Guide Date of issue: 5 October 2015 mtaasuper.com.audate Phone: 1300December 362 415 2014 of issue: The information in this document forms part of the Product Disclosure Statement for MTAA Super

More information

Your investment options explained

Your investment options explained Your investment options explained for the Plum Superannuation Fund Issued by the Trustee: PFS Nominees Pty Ltd ABN 16 082 026 480 AFSL 243357 Fund: Plum Superannuation Fund ABN 20 339 905 340 Administrator:

More information

INVESTING IN MORTGAGE FUNDS?

INVESTING IN MORTGAGE FUNDS? INVESTING IN MORTGAGE FUNDS? Independent guide for investors about unlisted mortgage funds Mortgage funds can also be called mortgage trusts or mortgage schemes. About ASIC The Australian Securities and

More information

T HE H ARTFORD F LOATING R ATE F UND Helping Investors Prepare for Rising Interest Rates

T HE H ARTFORD F LOATING R ATE F UND Helping Investors Prepare for Rising Interest Rates T HE H ARTFORD F LOATING R ATE F UND Helping Investors Prepare for Rising Interest Rates Michael J. Bacevich Portfolio Manager The Hartford Floating Rate Fund John P. Connor Portfolio Manager The Hartford

More information

FIDUCIAN AUSTRALIAN SHARES FUND

FIDUCIAN AUSTRALIAN SHARES FUND PRODUCT DISCLOSURE STATEMENT FIDUCIAN AUSTRALIAN SHARES FUND ARSN 093 542 271 2 MARCH 2015 This Product Disclosure Statement (PDS) provides a summary of significant information about the Fiducian Australian

More information

PERFORMING DUE DILIGENCE ON NONTRADITIONAL BOND FUNDS. by Mark Bentley, Executive Vice President, BTS Asset Management, Inc.

PERFORMING DUE DILIGENCE ON NONTRADITIONAL BOND FUNDS. by Mark Bentley, Executive Vice President, BTS Asset Management, Inc. PERFORMING DUE DILIGENCE ON NONTRADITIONAL BOND FUNDS by Mark Bentley, Executive Vice President, BTS Asset Management, Inc. Investors considering allocations to funds in Morningstar s Nontraditional Bond

More information

Listed Investment Companies (LICs) Research Methodology

Listed Investment Companies (LICs) Research Methodology Listed Investment Companies (LICs) Research Methodology May 2011 2011 Morningstar Australasia Pty Ltd. All information contained in this document is the property of Morningstar Australasia Pty Ltd ABN

More information

For high-yield bonds, market volatility can bring new opportunities

For high-yield bonds, market volatility can bring new opportunities Investment Perspectives For high-yield bonds, market volatility can bring new opportunities Kevin Lorenz and Jean Lin, portfolio managers for TIAA-CREF High-Yield Fund Article Highlights: The decline in

More information

Macquarie Index Tracking Global Bond Fund Product Disclosure Statement

Macquarie Index Tracking Global Bond Fund Product Disclosure Statement Macquarie Index Tracking Global Bond Fund Investment Management 4 July 206 Macquarie Index Tracking Global Bond Fund Product Disclosure Statement Contents. About Macquarie Investment Management Australia

More information

Seeking Alternatives. Senior loans an innovative asset class

Seeking Alternatives. Senior loans an innovative asset class Trends 09 10.11 Seeking Alternatives Senior loans an innovative asset class Dirk Wieringa, Alternative Investments Advisory Senior loans are an innovative asset class that provide a hedge against rising

More information

INVESTMENT OneAnswer Frontier Investment Portfolio

INVESTMENT OneAnswer Frontier Investment Portfolio INVESTMENT OneAnswer Frontier Investment Portfolio Product Disclosure Statement Product Book 1 July 2014 OneAnswer Frontier Investment Portfolio Entity details in this Product Disclosure Statement (PDS)

More information

FINANCIAL SERVICES GUIDE

FINANCIAL SERVICES GUIDE FINANCIAL SERVICES GUIDE Version 2.0 Dated 23 April 2014 CAPITAL 19 GLOBAL INVESTMENTS R E A L I S E T H E G R O W T H P O T E N T I A L O F I N V E S T I N G I N G L O B A L M A R K E T S 1 FINANCIAL

More information

Morningstar Category Definitions

Morningstar Category Definitions Morningstar Category Definitions Morningstar Australasia Pty Ltd Disclaimer: 2015 Morningstar, Inc. All rights reserved. The information in this document is the property of Morningstar, Inc. Reproduction

More information

Macquarie Significant Investor Visa Funds

Macquarie Significant Investor Visa Funds Macquarie Significant Investor Visa Funds Managed funds frequently asked questions For licensed financial advisers and licensed migration agents only only What does an investment in a managed fund entitle

More information

RISK EQUITIES BONDS PROPERTY INCOME SPIN-FREE GUIDE TO BONDS

RISK EQUITIES BONDS PROPERTY INCOME SPIN-FREE GUIDE TO BONDS INVESTING RISK EQUITIES BONDS PROPERTY INCOME SPIN-FREE GUIDE TO BONDS Contents Explaining the world of bonds 3 So what are bonds? 3 Understanding the risks 4 Three words you need to know 4 Understanding

More information

ACF morning workshop. Is your investment committee asking the right questions?

ACF morning workshop. Is your investment committee asking the right questions? ACF morning workshop Is your investment committee asking the right questions? Contents 1. Why would a charity want to consider a total return investment policy? What do we mean by total return? 2. Finding

More information