Bentham AM’s ‘deliberately conservative’ approach

Mike Taylor

Managing Editor and Publisher

19 May 2026

In what represents a sign of the times, Bentham Asset Management has confirmed that its high-yield exposure to muti-sector funds is the lowest it has ever been.

The investment manager’s position has been confirmed by Chief Investment Officer, Richard Quin who described Bentham’s positioning across multi-sector funds as “deliberately conservative” but noted the value to be found in supranational agencies and semi-government securities.

Quinn used a video commentary to note that the closing of the Strait of Hormuz had been the dominant market event of the quarter with bonds solid off, credit spreads widened and equities declining meaningfully.

“This supply-side shock is feeding into inflation and has repriced assets across the board, making it a very difficult environment for traditional portfolios.

“The AI disruption to software businesses was another significant story this quarter – one that would have dominated headlines without the Gulf crisis. The rapid improvement in AI models has dramatically changed the cost structure of software businesses and disrupted their underlying economics.

“Public credit markets saw spreads in software names widen around 375 basis points, but the largest impact was in private credit, where funds with high software exposure – around 30 per cent of many portfolios – saw six times the average redemption rate and were forced to gate redemptions at 5 per cent.

“Our positioning across the muti sector funds is deliberately conservative,” Quinn said. “We have reduced our high-yield exposure to around 4 per cent, the lowest we have ever held, and increased our allocation to supranational agencies and semi-government securities, which offer strong credit quality and still attractive margins.”

He said loan margins have also become more appealing for income, though broadly, credit markets remain expensive.

“We see real value in duration at current yields. We reduced our duration in March on the initial shock, then added some back in early April. The fund sits at around five years duration.

“Historically, energy shocks drive inflation higher before energy prices come down, and when they do, that provides a meaningful tailwind to bonds. At around 5 per cent, the Australian bond market is one of the most attractive in the world right now, and we believe investors will be well compensated over the next 12 months.”