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.

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