Freedom to exploit global fixed income opportunities
Aviva Investors Multi-Strategy (AIMS)
Fixed Income strategy
AIMS Fixed Income strategy aims to deliver a targeted return with limited volatility.
The current market environment means that investors need to look beyond traditional fixed income solutions.
Drawing on our global investment expertise, the AIMS Fixed Income strategy targets a three per cent per annum gross return over the Reserve Bank of Australia (RBA) cash rate (before charges) over rolling three-year periods, with volatility that is lower than global fixed income.
The strategy adopts an unconstrained approach, investing in a diversified portfolio of 25-35 strategies drawn from across the global fixed income universe.
Three strategy groups are combined to help keep the strategy on course to meet its objectives in all market conditions:
- Market strategies: harnessing the risk premia of traditional fixed income asset classes.
- Opportunistic strategies: aiming to profit from market mispricing.
- Risk-reducing strategies: preserving capital in times of market stress.
AIMS Fixed Income: Unconstrained, diversified and focused on capital preservation
The strategy is an outcome-oriented strategy with a focus on capital growth in all market conditions with lower volatility than traditional core fixed income approaches.
The performance of strategies used in the strategy are much less dependent on the direction of fixed income markets, meaning they will help diversify risks embedded within traditional fixed income portfolios.
Investments will be selected with an emphasis on absolute risk-adjusted returns as opposed to benchmark-relative returns. This affords the flexibility to only take risk where it is felt there is adequate reward.
The strategy offers dynamic and highly selective access to the full global fixed income universe and has the freedom to make use of derivatives. This not only enhances opportunities but allows risk exposures to be adjusted quickly and cost effectively, helping reduce volatility.
The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.
Certain assets held in the strategy could be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.
Bond values are affected by changes in interest rates and the bond issuer's creditworthiness. Bonds that offer the potential for a higher income typically have a greater risk of default.
The strategy uses derivatives; these can be complex and highly volatile. This means in unusual market conditions the strategy may suffer significant losses.
Contingent convertible securities (coco bonds) are complex, their income may be cancelled or suspended, they are more vulnerable to losses than equities and they can be highly volatile.
An experienced team boasting depth and breadth of fixed income expertise
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The OECD Common Reporting Standard for Automatic Exchange of Financial Account Information (CRS) will require certain financial institutions to report information regarding certain accounts to their local tax authority and follow related due diligence procedures. The Fund is expected to be a ‘Financial Institution’ under the CRS and intends to comply with its CRS obligations by obtaining and reporting information on relevant accounts (which may include your units in the Fund) to the Australian Tax Office (ATO). In order for the Fund to comply with its obligations, we will request that you provide certain information and certifications to us for the Funds’ compliance with the CRS. We will determine whether the Fund is required to report your details to the ATO based on our assessment of the relevant information received. The ATO may provide this information to other jurisdictions that have signed the “CRS Competent Authority Agreement”, the multilateral framework agreement that provides the mechanism to facilitate the automatic exchange of information in accordance with the CRS. The Australian Government has enacted legislation amending, among other things, the Taxation Administration Act 1953 of Australia to give effect to the CRS. The CRS will apply to the Funds with effect from 1 July 2017.