Our Philosophy
Perpetual believes in an active approach to managing credit securities to avoid downside risk inherent to credit. Conversely, we take a passive approach in exposure to government and semi-government securities in enhanced fixed interest portfolios.
We invest in high quality securities issued by corporations and securitisation vehicles. Our philosophy is to only invest where our systematic process establishes:
- a high degree of credit quality, and that
- a security exhibits relative value.
Our philosophy is to recognise the risk profile and to mitigate the unbalanced downside risk by focusing heavily on:
- investing in high quality securities
- properly valuing liquidity
- building highly diversified portfolios
- avoiding susceptibility to unexpected event risk
- actively managing credit spreads
Our Process
We believe that our investors value a credit enhancement style that:
- Consistently adds value
- Works across all market environments
- Provides highly risk-controlled outcomes
We believe that our approach to credit management is superior to approaches that target lower credit quality assets which emphasise passively collecting higher running yields. Our approach targets a more diverse spread of active positions while lowering the probability of default risk.
Our philosophy is to always take lower risk opportunities when possible. With our active trading approach, the credit quality of our portfolios is often higher relative to alternative strategies looking to generate the same excess return.
We monitor the portfolio for sources of risk and return as well as the weighted average credit margin. All else being equal, the weighted margin would determine the excess return on the portfolio over the benchmark.
Overall, our Australian Fixed Interest portfolio generally exhibits higher credit quality and superior value compared to the market as a whole.
Access Fund Overviews using the below links:
For further information please contact piresearch@perpetual.com.au
