Macro

We conduct a regular assessment of potential macro drivers of AUD credit spreads. The process uses both national and international influences. These drivers include both fundamental and technical issues. This view is then compared against the current positioning of the fund.

Specifically, the following factors are to be reviewed:-

  • The credit spread duration;
  • The interest rate duration;
  • Sector concentrations;
  • Credit rating concentrations;
  • Security type concentrations.

Micro

For each security, the expected 12 month total credit return is calculated and then compared to the risk taken.  This target considers factors such as the expected overall credit spread direction of the market, sector influence, changes in issuer credit fundamentals and existing relative value.

Spectrum Investment Process

Monitoring

The Spectrum team conducts a daily review of security performance, news, results and other factors that potentially could influence the prices of securities the Fund owns or could own. We also hold a weekly staff meeting where we discuss and assess whether the portfolio should be adjusted.

Liquidity

The historical and potential secondary market liquidity of each security of the portfolio is assessed. This, in conjunction with the expected maturity profile of the portfolio, is used to assess the Fund's liquidity profile. The overall fund is managed to deliver the liquidity needs of our investors.