How a multi-asset credit approach could help superannuation funds seeking better yields and diversification.
- In an unsupportive environment for government bonds, superannuation funds seeking a reliable income
from fixed-income investments may be exploring multi-asset credit strategies (MACs).
- MACs typically offer a core allocation to high-yield corporate bonds. In addition, by allocating to lower duration
assets such as asset-backed securities, loans and other floating-rate instruments, MACs may be
able to reduce their sensitivity to changes in interest rates.
- It is important to be mindful of the risks when investing beyond traditional credit markets. A disciplined
approach, which incorporates ESG analysis, can help to identify the investment opportunities, and avoid
the ‘losers’ which run the risk of distress or default.