Aviva Investors Multi-Strategy (AIMS) Fixed Income Fund
The Aviva Investors Multi-Strategy (AIMS) Fixed Income Fund offers investors access to a diversified portfolio of 25-35 global fixed income strategies.
The fund, launched in Australia in February this year, targets a three per cent per annum gross return over the Reserve Bank of Australia (RBA) cash rate (before charges), over rolling three-year periods, and aims to deliver that with volatility lower than global fixed income.
The fund accesses the global bond market by investing directly in bonds or by using derivatives. Investments may include asset-backed securities (ABS) and mortgage-backed securities (MBS), which are typically invested in European and North American markets.
"We’ve launched AIMS fixed income here at Aviva Investors to help address some of the core underlying issues we believe investors face in today’s more challenging and difficult market conditions," fund manager James McAlevey says. "We are very long-term in terms of the way that we aim to deliver these outcomes for investors."
"We tend to allocate risk to between 25 and 35 individual investment strategies, and it’s also important to recognise that with the proliferation of risk parity type vehicles, there’s no quantitative input, this is a purely qualitative and judgmental process," McAlevey says.
The fund might seek to benefit from currency movements or divergence of yields between sovereign debt. Another strategy it might invest in is emerging market growth, through investing directly in emerging market sovereign debt. And it could also seek to take advantage of a rise in commodity prices, by investing in the sovereign debt of commodity exporting countries.
The fund has a minimum investment of $500,000 and carries a management cost of 1.19 per cent of the fund's net asset value.
Q&A with fixed income portfolio manager James McAlevey
- What are some of the challenges facing investors in fixed income?
Whilst fixed income has been an exceptionally resilient asset class for the last 40 years delivering stable income and strong capital returns, limited drawdowns and diversification from equities, the ability of the asset class to continue to deliver these benefits going forward is likely to be challenged.
- Can you describe your investment approach?
Drawing on our global expertise, our investment approach for the fund involves:
• targeting a 3% per annum gross return above the Reserve Bank of Australia (RBA) cash rate (before charges) over a 3-year rolling period, regardless of market conditions;
• aiming to achieve the objective with less volatility than global fixed income, as measured by the Barclays Global Aggregate Bond Index;
• offering investors liquid and cost-effective access to the full fixed income universe through a diversified portfolio of 25-35 strategies; and
• helping diversify the risks embedded in traditional fixed-income portfolios.
The fixed income strategies the fund employs are divided into three categories.
Market Strategies: Our focus is on harvesting the risk premia from traditional fixed income asset classes which we believe offer attractive long-term returns. We use no strategic benchmark.
Opportunistic Strategies: These strategies aim to profit from market mispricing that may exist due to market segmentation, central bank intervention or regulatory changes.
Risk Reducing Strategies: In times of market stress, these strategies can significantly add to the portfolio’s returns, while retaining a neutral to positive return in our central scenario over a 3-year horizon.
Brett Jackson (right)
Managing Director, Australia
t: +61 (3) 9900 6272
Institutional Director, Australia
T: +61 (2) 8277 4133