Australia’s first managed portfolio service for bonds has now exceeded A$100m in investments, with a range of individual, institutional and not for profits (NFPs) embracing the service for its high level of transparency and performance
FIIG launched the Managed Income Portfolio Service (MIPS) in mid 2015 as a way for investors to retain direct ownership of their bond portfolio, and either receive fixed income or reinvest it while delegating the portfolio’s day to day management.
There are four different investment programs for MIPS, from which investors can select depending on their requirements for return and tolerance for risk. The minimum investment starts at A$250,000, and customised programs are available for larger investors with at least A$5m to invest. Strong performance has been a key driver of demand in recent months with average performance, net of fees, for the three months to end of May 2016, outlined below.
| ||Month ended May 31, 2016 ||Quarterly to May 31, 2016 ||Annualised (quarterly) |
|Conservative Income ||Launched May 2016 |
|Core Income ||1.31% ||0.88% ||3.54% |
|Income Plus ||1.11% ||1.48% ||5.90% |
|Inflation Linked ||0.88% ||0.68% ||2.72% |
Source: FIIG Securities
Since launching, more than 50 investors with an average investment of $1.75 million have utilised MIPS, with total investments passing $100 million last week, with the most popular being the ‘Income Plus’ program.
FIIG Head of Institutional Markets John Cummins said that the service “provided clients with direct access to a well diversified portfolio of direct bonds, combined with professional management and oversight”.
“Direct ownership of bonds has many advantages over buying them indirectly through a bond fund,” he said. “MIPS gives you all the benefits of beneficial ownership while delegating the day to day running of your portfolio to our fixed income experts.”
Investors through MIPS receive full professional investment management, retain beneficial ownership of their bonds, can choose to receive or reinvest income, and enjoy full transparency, with online access to details of their portfolio such as portfolio performance, valuations and transactions.