CFS platform adds Western Asset bond fund

Yasmine Raso

Senior Journalist, Financial Newswire

7 December 2022

Western Asset’s core fixed income investment option, the Australian Bond Fund, has been made available to investors and financial advisers via Colonial First State’s (CFS’) FirstChoice platform.

The fund offers a diversified portfolio of Australian fixed income assets including government and semi-government bonds, and supranational, corporate credit, mortgage and other asset-backed securities.

It aims to deliver risk-adjusted returns for its investors and has recorded long-term strong outperformance of its benchmark, the Bloomberg AusBond Composite 0+yr Index, since its inception in 1998.

“The Fund is currently positioned to generate positive active returns for investors as market expectations for the pace of central bank policy rate tightening moderate,” Anthony Kirkham, Western Asset’s Head of Investment Management, said.

“We would argue that the market has gone too far in factoring in rate rise expectations. The yield to maturity in the portfolio has grown substantially, to the highest level we have seen for some years.

“We continue to believe that the increasingly aggressive monetary policy track being priced in for the major central banks creates a greater likelihood of either an economic downturn or a moderation in policy setting projections. In either scenario, market yields would likely move lower again which would be expected to benefit those investing at current yields.”

Felicity Walsh, Managing Director and Head of Australia and New Zealand for Western Asset’s parent company, Franklin Templeton, said the fund’s addition to CFS’ FirstChoice platform will see investors gain access to its “crucial defensive ballast characteristics”.

“The Western Asset Australian Bond Fund is an industry recognised actively managed fixed income portfolio with a history of adding return relative to its benchmark since its inception, which is reflected in the many awards Western Asset has won,” she said.

“Western Asset’s active approach keeps the Fund’s interest rate positioning nimble and seeks to take advantage of volatility, credit opportunities and yield curve positioning.

“We will continue to provide access to our award-winning products and capabilities to a wide range of investors in Australia and we are excited to continue our long and valued relationship with Colonial First State.”