Mason Stevens has launched the first of its kind retail Australian Fixed Income Separately Managed Account (Mason Stevens Fixed Income SMA) in response to growing Adviser demand for direct access to bonds. Retail investors now have the opportunity to directly hold a portfolio of fixed income securities in retail sized parcels, professionally managed and serviced through efficient administration technology.
The Mason Stevens Fixed Income SMA is actively managed by an experienced investment team who invests capital in a portfolio of Australian denominated investment grade bonds, subordinated debt securities, hybrids, asset backed securities, residential mortgage backed securities, floating rate notes and inflation-linked bonds. Clients can start investing with a minimum of A$100,000.
Mason Stevens Managing Director, Thomas Bignill, said “Advisers want to give their clients the portfolio benefits of holding bonds directly. They are realising the advantages of doing so with respect to other asset classes such as equities, and by extending this service to fixed income, further builds credibility in their offer as well as efficiencies in their business. Further, it allows them to be better informed about how bond portfolios work and to have transparent and meaningful conversations with their clients. As the client is the beneficial owner, they know precisely what securities they hold.”
Despite the increased volatility experienced across financial markets in the last quarter, the Mason Stevens Australian Fixed Income SMA delivered a quarterly return of 2.24% (net of fees, as at 30 June 2016) (note 1). This was 1.78% in excess above its benchmark target return of RBA Cash Rate +2.00%.
“In this low growth, low return environment, we see more and more Advisers allocating to fixed income – this is the case with Advisers who are looking after the income needs of pre-retirees and retirees. The strategy is also ideal for SMSF trustees, who based on ATO statistics, tend to have high concentration risk to equities. By investing in high quality short to medium term bonds, fixed income can potentially facilitate the preservation of wealth. Fixed income is about delivering consistency of income and that resonates with the end client. Now they have the opportunity to further understand how it works through the transparency that a separately managed account brings” said Mr Bignill.
To assist Advisers in building goal based portfolios, we’ve developed a whitepaper that looks at the difference between investment objectives and financial objectives and how various investment structures can fulfil these objectives. The whitepaper highlights how Advisers can construct and manage the asset allocation of diversified investment portfolios under any market situation and any client financial circumstance – ensuring a complete alignment of interest between client, Adviser and investment manager to satisfy the goal based portfolio.
The inception date of the Mason Stevens Fixed Income SMA is 30 March 2016.
