• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer
  • Subscribe
  • Twitter
  • RSS Feed

Investment News NZ

Investment News provides financial advisers news stories from the financial industry in New Zealand. Subscribe to our free weekly newsletter.

  • Home
  • News
  • Kiwisaver
  • Subscribe
  • About
  • Advertise
  • Contact
You are here: Home / Investment News / Australasian investors looking offshore for fixed income

Australasian investors looking offshore for fixed income

April 2, 2017

Tad Fetter: Brandywine director

Brandywine Global Investment Management should know a lot about the Australian institutional market, for which it manages about US$4.4 billion. Big super funds are worried about China and they’re worried about currency. But things are looking up.

On a regular visit to Australia, Tad Fetter, Brandywine director and head of business development and client service for international, said last week that while interest rates would rise again over time, “it won’t be a vertical shift”.

Australian investors, which had reduced their global fixed income exposures in recent years, with good effect, were starting to increase them again, he said, despite the rise in US rates and the US dollar.

About half of Brandywine’s US$65.5 billion under management is invested outside the US, where rates have continued to sink since the global financial crisis and returns have been better.

There are dark clouds on the domestic horizon, for Australian fixed interest, however – a scenario which is prompting a reassessment, Brandwine believes, but opportunities are presenting themselves elsewhere.

“We have already made a lot of money in a low-yield environment back to about 2010,” Fetter says. “During that time yields have gone lower and lower… Now there is a synchronized uptick in global growth, which actually started prior to the US elections and should continue, maybe at a slower pace.”

He says that President Trump and the uncertainty about his fiscal policies have huge implications on global economic growth and, by default, on global markets and the “jury is still out” on whether the deflation versus reflation trend was the start of a new secular shift. “Some markets have overshot,” he says.

Brandywine, an affiliate manager of Legg Mason Global Asset Management, is an active index-agnostic value manager with a range of fixed income strategies dating back to 1992. Most of the Australian-sourced funds are institutional mandates, however, Fetter says that the retail market is presenting increasing opportunities. It also has about A$1 billion in New Zealand-sourced money.

“The retail side has been given a kick-along by some good ratings,” Anthony Kaleta, the regional relationship manager for Australia and New Zealand, said.

The firm launched an Australian-domiciled trust in 2011, which currently has about A$530 million invested in an “opportunistic” fashion. The fund last year provided a return of 8.75 per cent, compared with the index return of only 1.65 per cent, on an Australian-dollar basis. Its five-year return was 8.50 per cent, against the index of 5.84 per cent.

“I can argue all day as to why active management is worthy of higher fees [than passive] and why we can beat the index all day every day,” Fetter says.

He believes that while China “was not on the global market’s front burner” during the first quarter of this year, it still provides a favourable backdrop for risk assets, particularly in emerging markets portfolios.

“We’re still attracted to emerging markets valuations despite the ‘Trump protectionist’ risk,” he says. “There’s an invisible hand pushing Australian investors outside your local market.”

 

Greg Bright is publisher of Investor Strategy News (Australia)

Twitter0
LinkedIn0
Google+0
Facebook0

Read More » Investment News

Recent articles

  • New Salt suite to spice up fund mix January 17, 2021
  • Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman January 17, 2021
  • Westpac follows ANZ with Northern Trust mandate… January 17, 2021
  • … as Trust Management wins over another senior BT investment hand January 17, 2021
  • Capital ventures into BlackRock’s ETF territory January 17, 2021
  • Fresh CIO role as South Pacific aims for co-investments January 17, 2021
  • Lessons from 2020: don’t stop thinking about tomorrow January 17, 2021
  • SSGA to push big firms on ESG, stays mum on merger January 17, 2021
  • Low-carbon switch: why electric future turns on listed infrastructure investor January 17, 2021

Primary Sidebar

WEEKLY NEWSLETTER

Sign up here to receive our weekly newsletter.
Learn More »

Most Recent Investment News

New Salt suite to spice up fund mix

January 17, 2021

Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman

January 17, 2021

Westpac follows ANZ with Northern Trust mandate…

January 17, 2021

… as Trust Management wins over another senior BT investment hand

January 17, 2021

Capital ventures into BlackRock’s ETF territory

January 17, 2021

Search by Keyword

Investment News

  • New Salt suite to spice up fund mix January 17, 2021
  • Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman January 17, 2021
  • Westpac follows ANZ with Northern Trust mandate… January 17, 2021
  • … as Trust Management wins over another senior BT investment hand January 17, 2021
  • Capital ventures into BlackRock’s ETF territory January 17, 2021
  • Fresh CIO role as South Pacific aims for co-investments January 17, 2021
  • Lessons from 2020: don’t stop thinking about tomorrow January 17, 2021
  • SSGA to push big firms on ESG, stays mum on merger January 17, 2021
  • Low-carbon switch: why electric future turns on listed infrastructure investor January 17, 2021
  • Bitcoin: the nonsensical asset that makes sense for the times January 17, 2021

Investment News Archive

Most Popular Articles

  • Westpac NZ flags retail advice sale to Forsyth Barr posted on October 19, 2020
  • The horror year in technicolour: free KiwiSaver 13 report released posted on September 30, 2020
  • NZ share-trading splurge could trigger tax alarms… posted on October 5, 2020
  • Flint set to spark platform competition posted on August 17, 2020
  • Four to the core: Smartshares to expand, rearrange and reprice ETFs posted on June 22, 2020
  • Kitset KiwiSaver scheme set to unwrap in spring posted on April 27, 2020
  • Funds eye bargains, self-shoppers hoard cash, KiwiSavers turn conservative posted on March 15, 2020
  • AMP Capital NZ chief quits amid equities exodus offshore posted on August 28, 2020

Sponosored Content

David-Boyle

On the industry play-list: four chart-topping regulations for 2021

David-Boyle

Charge of the lite (advice) brigade

Nathan Field

Pandemic Baby Boom a Bust

Star-date 2020: it’s inflation Jim but not as we know it

Quick-links to Popular News

  • FAP Compliance
  • Coronavirus
  • New Appointments
  • Financial Markets Authority (FMA)
  • Kiwisaver
  • Climate Change
  • Crypto Currency
  • Blockchain
  • Insurance

Secondary Sidebar

Recent News

  • New Salt suite to spice up fund mix January 17, 2021
  • Wealth head quits ASB for Tower job; Platinum loses Asia manager; Matterson moves from Milliman January 17, 2021
  • Westpac follows ANZ with Northern Trust mandate… January 17, 2021
  • … as Trust Management wins over another senior BT investment hand January 17, 2021
  • Capital ventures into BlackRock’s ETF territory January 17, 2021
  • Fresh CIO role as South Pacific aims for co-investments January 17, 2021
  • Lessons from 2020: don’t stop thinking about tomorrow January 17, 2021
  • SSGA to push big firms on ESG, stays mum on merger January 17, 2021
  • Low-carbon switch: why electric future turns on listed infrastructure investor January 17, 2021
  • Bitcoin: the nonsensical asset that makes sense for the times January 17, 2021

Footer

Copyright ©2020 InvestmentNews.co.nz — All Rights Reserved ·— Terms & Conditions