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Fixed Income

Macquarie Treasury Strategy

Overview

Deep expertise and experience in Australian cash management

We are one of Australia's largest and most highly experienced cash and fixed income managers, having launched Australia's first cash management trust in 1980.1

True-to-label cash solution

Our transactional cash strategies consist of vanilla cash instruments, and we do not seek to add value from higher-risk investments such as asset-backed securities.

Liquidity focus

We hold a conservative allocation to term deposits (staggered maturities) and a preference for major bank issuance to maintain the liquid nature of our portfolios.

1 Rainmaker Roundup Report (June 2024)

Philosophy

Macquarie Fixed Income’s philosophy has been built over the years through our extensive in-house research. Our philosophy is primarily based on capital preservation and a strong respect for liquidity. As such, our priority is much more about avoiding the negatives and limiting drawdowns rather than chasing the small positives. Over the long term, this investment philosophy and disciplined application has delivered attractive outcomes for our clients.

Key features

True-to-label cash manager

  • Our investment approach focuses on liquidity and capital stability, consisting of high-quality vanilla cash instruments and representing the return and risk profile of a cash investment.

Proven performance

  • Over long-time horizons and through market cycles, the strategy has consistently outperformed its benchmark2

Access to investment expertise

  • Macquarie Fixed Income is one of Australia's largest and most experienced fixed income managers. Our position in the market provides access to investment opportunities that may not otherwise be available to individual investors.

2 As at 31 March 2024 (before fees), Bloomberg AusBond Bank Bill Index. Past performance is not a reliable indicator of future performance.

Process

Macquarie’s cash management strategies are driven by disciplined and thorough processes, and are backed by in-house economic and quantitative analysis. We actively manage the maturity profile of the strategy to take advantage of movements in market interest rates. If we believe that interest rates will rise, we will shorten our maturity structure. Conversely, if we believe that interest rates will fall, then we will lengthen our maturity structure. After determining the maturity profile, we use a number of analytical tools to select the securities offering the best value and to find the most appropriate yield curve position.

 

Duration

  • We manage the portfolio’s sensitivity to changes in interest rates by comparing our expectations for the path of monetary policy against current market pricing.

Yield curve

  • We manage the bank bill yield curve to seek the most favourable investment term.

Yield enhancement

  • We use credit management to add value by investing in the floating-rate notes and term deposits issued by bank or governments where our analysts confirm high credit standing with the securities having a significant yield benefit.

Management team


For more information about our Credit capabilities

Learn more

Risks

All investments carry risk. Different investments carry different levels of risk, depending on the investment strategy and the underlying investments. Generally, the higher the potential return of an investment, the greater the risk (including the potential for loss and portfolio value variability over the short term).  Some of the significant risks of the Strategy are included below.

Investment risk: The Strategy seeks to generate higher returns than traditional cash investments. The risk of an investment in the Strategy may be higher than an investment in a typical bank account or term deposit. Distributions may fluctuate, as may the Strategy’s value. The value may vary by material amounts, even over short periods of time.

Income securities risk: The Strategy may have exposure to a range of income securities. The value of these securities may fall, for example due to market volatility, interest rate movements, perceptions of credit quality, supply and demand pressures, a change to the reference rate used to set the value of interest payments, market sentiment, or issuer default. These risks may be greater for securities offering higher returns. Income security risk may cause volatility and/or financial loss to a Strategy.

Interest rate risk: The value of the investments that the Strategy has exposure to will generally be sensitive to changes in market interest rates. In addition, changes to reference rates may impact the value of your investment in a Strategy. The Strategy may take active interest rate positions, either through physical security selection or through derivatives. Movements in market interest rates may impact the value of your investment in the Strategy.

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Disclaimer

Macquarie Asset Management (MAM) is the asset management division of Macquarie Group. MAM is an integrated asset manager across public and private markets offering a diverse range of capabilities, including real assets, real estate, credit, equities and multi-asset solutions.

This information is a general description of Macquarie Asset Management only. The views expressed in this website represent those of the relevant investment team and are subject to change. No information set out above constitutes advice, an advertisement, an invitation, a confirmation, an offer or a solicitation, to buy or sell any security or other financial product or to engage in any investment activity, or an offer of any banking or financial service. Some products and/or services mentioned on this website may not be suitable for you and may not be available in all jurisdictions.

Investing involves risk including the possible loss of principal. The investment capabilities described in this website involve risks due, among other things, to the nature of the underlying investments. All examples herein are for illustrative purposes only and there can be no assurance that any particular investment objective will be realized or any investment strategy seeking to achieve such objective will be successful. Past performance is not a reliable indication of future performance.

Before acting on any information, you should consider the appropriateness of it having regard to your particular objectives, financial situation and needs and seek advice.

Other than Macquarie Bank Limited ABN 46 008 583 542 (“Macquarie Bank”), any Macquarie Group entity noted in this website is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia).  The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank.  Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities.  In addition, if this website relates to an investment, (a) the investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group entity guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.

Additional important information (including regional disclosures)

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