Smart Investor magazine, Up To Speed column, December 2008
Aviva Investors Prof Premier Fixed Income Fund
What is it?
It’s a fixed income fund, mainly Australian but with 25% foreign exposure.
A new fund?
Not exactly. It’s been known to investors in the past as the Portfolio Partners Prof Premier Fixed Income Fund, but Aviva took over the Portfolio Partners brand in October. It didn’t just change the name, though: in several instances, including this one, it changed the mandate too.
Originally the domestic investments were actively managed, and the international ones passively – that is, in the quarter of the fund that invests in global bonds, it was effectively an index fund. Now, the international chunk is actively managed too.
Aviva’s investment teams in the UK and US. Previously Portfolio Partners, a Melbourne-based fund manager, presumably decided its expertise was local and not international; Aviva believes it has the nouse to manage actively worldwide. Since Aviva has over A$500 billion in funds under management it does have some justification in making this claim.
How’s it done over the years?
Over the five years to September 30 the gross return has been 6.1% a year, compared to the benchmark of 5.8%; however net of fees, it’s done 5.7%, just slightly lower than the benchmark. Management fees are 0.36% per year and minimum investment is A$20,000.
Is it a good time to be in fixed income?
Well, lately this asset class has at least made money, which is dramatically better than can be said for any stock markets. All balanced portfolios include some fixed income (in Australia it’s often called fixed interest).