ACBC, Praemium unveil fixed income SMA


By Leanne Abbas

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Australian Corporate Bond Company (ACBC) has partnered with managed account provider Praemium to launch a pure fixed income separately managed account (SMA).

The Yield Plus portfolio was the only senior unsecured fixed income SMA available in the Australian market and would be exclusively offered to financial advisers via the Praemium SMA platform, ACBC said.

The model portfolio invested in individual investment-grade corporate bonds through ACBC’s range of exchange-traded bonds (XTB), and did not include hybrids or subordinated notes that allowed bonds to be paid off prior to their maturity date.

XTB portfolio manager Ian Martin, who designed the SMA portfolio, said he believed it represented a step forward in ACBC’s goal to become the leader of innovation in the local fixed income market.

“The Yield Plus model portfolio has been developed in direct response to demand from advisers looking for an efficient and transparent way to invest in fixed income,” Martin said.

“It will allow advisers to deliver a higher rate of return than many cash-like investments such as TDs (term deposits) and higher yields than fixed income ETFs (exchange-traded funds).”

Commenting on the partnership, Praemium head of distribution Martin Morris said he was delighted to be able to provide a new fixed income solution to advisers.

“In the current low interest rate environment, more advisers are looking for ways to deliver income and yield to clients, but without a significant increase in risk and volatility,” Morris said.

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