While fixed income markets are generally efficient we believe that different fixed income market players are driven by competing influences, which create short term mispricing opportunities. We aim to exploit these opportunities through active management to deliver consistent outperformance within a portfolio’s risk guidelines.

Our specialist fixed income team manages a range of fixed income securities, including traditional bonds (Australian and international), inflation-linked bonds and higher yielding fixed income securities (such as convertible notes and preference shares).

In traditional Australian fixed income portfolios, we seek to add value through active positioning based primarily on short-term trading views, rather than long-term strategic views. We take a large number of small active positions with a view to achieving incremental gains from three key activities: duration, yield curve positioning and sector selection.

Where appropriate we are able to draw upon the expertise of Aviva Investors’ investment teams in the USA and United Kingdom to actively manage our international fixed income investments.

When investing in inflation linked securities we seek to add value through either our exposure to this sector or by active management within the sector.

When investing in high yield fixed income securities we undertake extensive research of individual securities and the issuer, with the aim of ensuring we understand the risks involved. We believe that yields on these securities tend to overcompensate for default risk, which can be exploited for our clients’ benefit. In addition, we aim to add extra value through superior stock selection.

In addition, our fixed income team is able to manage alternative fixed income strategies using derivatives.

Product Disclosure Statement