Western Asset Australian Bond Fund added to CFS FirstChoice
Felicity Walsh
The Western Asset Australian Bond Fund has been added to Colonial First State FirstChoice platform, giving investors and financial advisers greater access to a highly regarded, core fixed income investment option.
Launched in 1998, the AUD $1.4 billion Fund boasts a long-term track record compared to that of its benchmark Bloomberg AusBond Composite 0+yr Index, of delivering risk adjusted returns for its investors through a diversified portfolio of domestic fixed income assets including government and semi-government bonds, supranational, corporate credit, and mortgage and other asset-backed securities. [1]
The Fund is strategically positioned to deliver the crucial defensive ballast characteristics sought by investors in the asset class. Western Asset Head of Investment Management, Anthony Kirkham, says “the Fund is currently positioned to generate positive active returns for investors as market expectations for the pace of central bank policy rate tightening moderate.”[2]
Kirkham says: “We would argue that the market has gone too far in factoring in rate rise expectations. The yield to maturity in the portfolio has grown substantially, to the highest level we have seen for some years. We continue to believe that the increasingly aggressive monetary policy track being priced in for the major central banks creates a greater likelihood of either an economic downturn or a moderation in policy setting projections. In either scenario, market yields would likely move lower again which would be expected to benefit those investing at current yields.”
Felicity Walsh, Franklin Templeton’s Managing Director and Head of Australia and New Zealand, says “ the Western Asset Australian Bond Fund is an industry recognised actively managed fixed income portfolio with a history of adding return relative to its benchmark since its inception, which is reflected in the many awards Western Asset has won.” [3]
Walsh says: “Western Asset’s active approach keeps the Fund’s interest rate positioning nimble and seeks to take advantage of volatility, credit opportunities and yield curve positioning.
We will continue to provide access to our award-winning products and capabilities to a wide range of investors in Australia and we are excited to continue our long and valued relationship with Colonial First State.”, Walsh notes.
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