Media release: Why leave the best fixed income opportunities on the table, asks portfolio manager

  • Investors who only invest in Australia are missing out - particularly with interest rates at record lows.

  • Zenith Investment Partners reiterates PM Capital Enhanced Yield Fund’s “Recommended” rating

Australian investors are leaving “a lot of opportunities on the table” by restricting themselves to domestic fixed income securities when they can least afford to, says Jarod Dawson, Portfolio Manager of the PM Capital Enhanced Yield Fund (EYF).

Mr Dawson said: “With official interest rates at a record low of 0.75% in Australia, investors more than ever need to look globally to access the best risk/ reward opportunities – ie to identify the true anomalies in global fixed income markets.

“If you don’t, you may be exposing yourself to more volatility and less return than you need to in what people typically think is a relatively safe sector.”

“Australia makes up such a small fraction of global fixed income markets that unless you're investing capital globally, you're really leaving a lot of opportunities on the table.”

Research house Zenith Investment Partners has just reiterated its “Recommended” rating on EYF, which targets a return in excess of the RBA's official cash rate, with a regular income stream, and an emphasis on capital preservation and low volatility.

Mr Andrew Yap, Zenith’s Head of Multi-Asset and Australian Fixed Income, said of EYF: “Underpinning our conviction is our high regard for its long-standing portfolio manager that has the skills and experience to successfully manage the fund, with strong support provided by the broader PM Capital team, and their demonstrated track record of successfully navigating the fund through a range of market conditions, consistently delivering upon its performance objectives.”

Mr Dawson said: “We don’t think just getting a broad exposure to fixed income markets is effective. It's really about picking the eyes out of what we think are the absolute best fixed interest investments around the world. And then when we find them, we put a meaningful amount of capital into them.”

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The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned October 2019) referred to in this piece is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product. Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments.  Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines.