Professional Planner|Zenith Fund Awards 2015 – Australian fixed interest

Winner: PIMCO

Zenith says: Zenith views PIMCO as a standout manager within the domestic fixed interest market. We have high regard for the Sydney-based team, which remains under the leadership of Robert Mead. This team benefits strongly from the significant resources available across PIMCO’s global networks, not least the specialist knowledge of its regionally-based portfolio and analytical teams. Zenith continues to view favourably PIMCO’s global and scalable investment process, which combines top-down macro-economic analysis with bottom-up security selection to identify the most attractive investment opportunities.
– Andrew Yap, head of multi asset and income research

Zenith sector review: The Australian fixed interest (AFI) sector has produced yet another year of solid returns, aided by a continued rally in bonds and tightening credit spreads. That said, returns generated across Zenith’s universe of rated managers have been varied, with a significant degree of dispersion recorded across a range of investment styles. This disparity was most pronounced across the “bonds” sub-asset class – a factor we attribute to the resurgence of active rate and curve strategies, with credit-orientated strategies featuring less prominently for the first time in many years. A common theme has also been the willingness of managers to add global allocations to their AFI portfolios, with many noting the greater breadth of opportunities and liquidity of global markets.

Robert Mead, managing director (Sydney), head of portfolio management, PIMCO (pictured): The biggest issue in the past 12 months has been that Australia for a long time had avoided what the rest of the developed world was suffering in terms of potential growth. And with China’s growth finally starting to falter, it came back to roost in Australia in relation to commodity prices, in relation to the Aussie dollar, in relation to the RBA being brought back into the mix, having cut rates twice already this year. It was Australia’s time to start to feel some of the “new normal” in our own backyard. It was really very early in the year, as we came out of December last year, that the RBA was still contemplating a period of [leaving interest rates] on hold. Yet in February, the first meeting of the year, we had an immediate rate cut. We also had, I think now it totals 40 different central banks around the world having eased policy this year. It’s an incredible number of easing moves across the year, especially when we thought the world economy was doing a little better in Q4 last year – it turns out it wasn’t doing well enough to allow central banks to begin tightening policy.

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