We offer a range of global and enhanced fixed interest, managed and enhanced cash, and credit capabilities.
Our team’s approach to portfolio construction via true ‘Alpha Beta separation’ allows us to provide highly customisable investment strategies across any Fixed Income market with our Alpha overlay process incorporated within the strategy. Depending on clients’ requirements and their existing configuration we are able to deliver to the client’s active risk budget with the ability also to select only the appropriate alpha strategies across Duration, Cross-market, yield curve, credit and currency. We also build specific tail-risk overlay and other completion strategies for large institutions.
A quantitative foundation with a qualitative overlay
A key part of our investment style and process is how we combine economic and market model data with our economic, market and credit issuer views. This process allows us to construct portfolios which aim to generate outperformance while remaining well balanced and risk controlled. There are three key ways our ‘truly active’ approach differs from a conventional active fixed interest manager:
- Our duration trading strategies tend to be shorter in time frame with profits realised more regularly and losses stopped according to strict stop loss criteria.
- Beta (market risk) is separated from Alpha (additional return driven by skill). The aim is to produce that base return and then add alpha relative to that benchmark.
- The investment process utilises a broader opportunity set than traditional Australian fixed interest managers to drive Alpha. This gives a much more diverse toolkit with which to drive return when compared to most other managers – a toolkit that has been developed over many years’ experience.
An important part of the approach is striving to ensure that each of the strategies implemented are uncorrelated so that the portfolio’s active performance will not be determined by a single, or few, outcomes or themes in the market place. This should deliver a more consistent active return profile over time.