Nikko Asset Management Australia, a Nikko AM group company with offices in Australia, manages the Australian Fixed Income strategy. The strategy aims to achieve outperformance, with a strong focus on diversifying the portfolio's sources for value-adding activities to achieve lower portfolio risk.

Key Characteristics
  • Active, opportunistic and disciplined investment style
  • AA- average weighted credit rating
  • Top-down fundamental value-adding process is merged with a bottom-up quantitative portfolio construction and credit process
  • 70-100 securities

The investment philosophy is based on identifying pricing anomalies through a unique combination of fundamental economic analysis and in-depth valuations. Inherent in this philosophy is the belief that markets are often incorrect in forecasting short- and medium-term influences and conditions.

Rather than one single approach, the investment team uses multiple strategies such as duration, curve positioning, sector rotation and credit; this allows them to take advantage of opportunities in all parts of the fixed income market, across a range of market conditions. Some of the following market parameters are regularly considered as inputs to the portfolio construction process.

  • Implied forward rate of overnight cash
  • Level of absolute yields
  • Technical factors
  • Break even analysis
  • Cheap/expensive analysis

The degree to which any one area of input is weighted for consideration is dependent on the prevailing market conditions.