Dynamic and benchmark unencumbered
A dynamic and benchmark unaware approach, seeking to capitalise on the best opportunities based on prevailing market conditions
Flexible investment approach
Flexibility to invest across global fixed income markets with deep analysis and research to identify high conviction opportunities
Clear investment philosophy
Clear philosophy focused on minimising downside risk and managing liquidity
Our investment philosophy is built on years of extensive in-house research, and is based on fundamental research, capital preservation and a strong respect for liquidity.
When managing global fixed income portfolios, we apply this investment philosophy via a dynamic investment approach, aiming to capitalise on the best opportunities on offer.
Clear philosophy
- Focus on managing downside, liquidity and fundamental research. Since fixed income risk is asymmetric, the team focuses on managing downside risk. We have a strong respect for liquidity as our proprietary research has identified liquidity as the biggest risk in managing fixed income portfolios, particularly credit assets. We believe that the risk/return characteristics of our philosophy are far more compelling than chasing yield further up the risk spectrum or in complex securities where probabilities of default could be higher than expected.
Dynamic approach
- Capitalise on the best opportunities on offer across global fixed income markets. Our dynamic approach combines top-down strategic positioning in duration and credit, with high conviction bottom-up security selection from a large investment universe. Leveraging our global investment strategy framework and fixed income capabilities we seek to optimise duration and credit in the strategy based on prevailing market conditions. In populating each sector, the investment team focuses on investing in high conviction trades.
Diversification
- A bond solution that diversifies equities risk. The Strategy provides investors with exposure to global fixed income with the risk profile of a defensive bond portfolio. The strategy offers diversification to equities risk within a broader balanced portfolio given the typically low or negative correlation of bond prices with other risk assets.
The Macquarie Dynamic Global Bond Strategy uses a global and dynamic approach which combines top-down strategic positioning in duration and credit, with high conviction bottom-up security selection. Our strategic positioning aims to ensure that the levels of duration and credit are optimised to prevailing market conditions and economic cycles. Any tactical tilts to protect the portfolio and/or capitalise on opportunities are set from these strategic levels of duration and credit exposure.
The majority of the portfolio invests in a core holding of government bonds and investment grade credit. From this core holding, we make strategic allocations to high yield and emerging markets, with the decision to do so drawing from our global investment strategy framework and sector rotation processes. In populating each sector our security selection process focuses on investing only in high conviction trades as determined by our team of global fixed income professionals operating from London, New York, Philadelphia and Sydney.
Positions are primarily hedged. The strategy can also add limited active currency positions mainly used as a hedging tool to balance credit exposure. Duration and sector ranges are shown to the right.
For more information about our Credit capabilities
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.
For investors in EMEA: Past performance does not predict future returns. Strategy performance is available upon request.
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