Australian Unity Investments (AUI) has launched the Altius Bond Fund aimed at retail investors.
Altius is a fixed interest boutique fund manager formed as a joint venture between its principals – Mr Bill Bovingdon, Mr Chris Dickman and Mr Gavin Goodhand – and AUI.
The Fund will invest in fixed interest securities, derivatives and cash, including government, corporate, bank and other bonds, debentures, notes and other debt-related securities.
Its aim is to optimise returns regardless of a rising interest rate or deteriorating credit environment, and to outperform both cash and bonds in all economic cycles. The minimum initial investment in the fund is $5,000 and it accepts minimum additional investments of $1,000.
Mr Bovingdon, chief investment officer at Altius, said that the company has spent a great deal of time researching the issues arising from the global financial crisis (GFC), and how they affected investors.
“One of the lessons we learnt is that fixed interest funds now not only need to have the flexibility to perform well regardless of the economic cycles, but also much better credit management.
“The structure of the Fund allows the Altius team to use a range of approaches to manage risk.
“We will use instruments such as derivatives and swaps to hedge the risks that we don’t want to be exposed to, while at the same time seeking to outperform both cash and bonds.
“We believe that a good bond fund should provide investors with a defensive asset in times of turbulence while also providing flexibility and liquidity – unlike term deposits where money is locked away, and returns may not be delivered until the end of the term.
“The Altius Bond Fund is intended to provide a more diversified and flexible option for investors, due to the approach of taking advantage of both credit and thematic opportunities in the market rather than focussing on just one strategy.
“With emerging investor concerns about future returns from term deposits, a fund such as this should hold many attractions,” Mr Bovingdon said.
Ms Kirsty Dullahide, AUI’s head of portfolio management and strategy, concurred that the timing of the Fund is ideal as it will be particularly attractive to investors who are still in term deposits but becoming aware that there are better long-term investment options.
“Feedback from investors and advisers is that term deposits continue to be used extensively by investors as the preferred ‘safe haven’ following the GFC and the introduction of the government bank guarantee.
“However there is increasing evidence that many are beginning to look for other options that still provide capital stability but also offer the opportunity for good long-term returns.
“There is also growing recognition that term deposit performance is likely to fall away over the medium term and investors locked in to them could miss out on better returns from other fixed income investments such as bonds.
“There are different styles of fixed income management and in this environment we believe it is good to be able offer investors a choice.
“This is therefore a particularly good time to introduce a bond fund with the Altius philosophy as we expect a significant growth in the funds being allocated to fixed interest in the immediate and medium term future.
“This growth in funds under management will not just come from switches from term deposits but also from baby-boomers reaching retirement and looking to combine capital security with regular income,” Ms Dullahide said.
Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has $11.9 billion in funds under management as at 30 June 2011. Its investment approach is to use its established in-house expertise in property and mortgages while also forming joint ventures and strategic alliances with other organisations with specialist expertise.
Altius Asset Management is a boutique fixed interest asset management business, formed through a joint venture with AUI. Altius takes a diversified approach to fixed interest funds management, combining both credit and duration strategies, and seeks to optimise returns for investors in all market conditions.
For more information please contact:
Bill Bovingdon – 0414 508 644
Kirsty Dullahide – 03 8682 4404