The key premise behind the fund was its ability to maintain a flexible exposure to Australian fixed interest by tactically allocating among government bonds, corporate debt and cash based on the investment team's view of the interest rate and credit cycle, Zenith investment analyst James Tsinidis said.
"The structure of the fund is intuitively appealing for investors that seek to outsource this tactical decision to a professional fixed interest manager," Tsinidis said.
The fund aims to outperform an equally weighted benchmark of the UBS Australian Bank Bill Index and the UBS All Composite Bond Index.
But the fund was strongly focused on providing positive absolute returns to investors and maintaining portfolios that were defensive in nature in poor economic conditions, Tsinidis said. "In Zenith's view the fund's focus on capital preservation is a key differentiator relative to traditional bond funds, which may provide negative returns in rising interest rate environments," he said.
