Core Plus Strategies Fund

The Australian bond market has undergone a significant evolution over the last decade. We have seen a growth in sources of yield available to Australian investors, such as corporate bonds, high yield bonds, loans, emerging markets and leveraged credit. The Australian credit market has been a solid earner for investors, but relative to other countries, offers limited opportunities for sector and stock selection. For investors wishing to take greater active risks from investing in credit markets, higher investment return potential is available through global credit markets.

Introducing Core Plus Strategies

The Core Plus Strategies Fund (CPS) has been developed to provide investors with a broader opportunity set of securities by investing in global credit, whilst still providing access to the less volatile, Australian bond market. The inclusion of global credit in an Australian bond portfolio creates greater diversification within a risk-managed framework.

The fund focuses on providing investors with investment returns through:

• active allocation between Australian and global credit markets;
• stock selection from a broad universe of Australian and global securities;
• the implementation of high yield strategies; and
• duration and currency management to take advantage of movements in both interest rates and currency.

Managed by two fixed interest specialists

AMP Capital has teamed with Goldman Sachs Asset Management (a fixed income and money market specialist) to manage CPS.

AMP Capital is responsible for the asset allocation between Australian and global credit markets as well as managing the Australian bond portfolio of CPS. This includes managing domestic credit, high yield securities, interest rates and benchmark hedging.

Goldman Sachs undertake active sector, stock and country selection including currency and interest rate management. The portfolio is fully hedged back into Australian dollars.

What CPS offers an Investor

• Potential for higher returns than a pure Australian bond portfolio
• Increased liquidity and diversification due to a much broader investment universe
• Exposure to a range of higher yielding securities – the fund can invest from investment grade to sub-investment grade credit qualities, cross over credits and asset-backed securities and emerging market debt
• Proven credit management expertise – utilising the resources of two quality fixed interest teams