Fixed Interest

Investment philosophy
Tyndall’s fixed income investment philosophy is based on identifying pricing anomalies through a unique combination of fundamental economic analysis and in-depth valuations. Inherent in this investment philosophy is the belief that markets are often incorrect in forecasting short- and medium-term influences and conditions.

The Tyndall fixed income team believes that the efficient market hypothesis often doesn’t hold due to varied reactions to information as it becomes available. The resulting disequilibrium in the balance of demand and supply, particularly in th short term, causes prices to adjust to new levels, as new information is absorbed, often resulting in markets overshooting far away from their fair value levels.

This mis-pricing can be exploited via the application of sound fundamental analysis, disciplined risk and return analysis, skill, experience and a robust process. This market behaviour often provides opportunities for managers to add value for their clients.

The resulting mis-pricing by the market can not only occur, but may continue for a considerable period of time. Therefore a disciplined risk control process must be employed to control the risk from the decision making process as well as consistently reviewing the Tyndall fixed income current strategy and performance emanating from these decisions.

Investment style and process
Tyndall’s fixed income process aims to achieve outperformance with a strong focus on diversifying the portfolio’s sources for value-adding activities to achieve lower portfolio risk. Consistency in delivering excess returns within a moderated risk strategy is fundamental to this philosophy.

Tyndall’s fixed income management style is active, opportunistic and disciplined. It uses a ‘top-down’ fundamental value-adding process merged with a ‘bottom-up’ quantitative portfolio construction and credit process.

Top-down (or ‘macro’) strategies include positioning the portfolio to take advantage of interest rate, yield curve and sector risk premiums as well as our overall views of the economic and business environment.

Bottom-up strategies include security specific analysis within each sector as well as security-specific yield curve analysis. The most important element of the bottom-up analysis is the commitment of company management in maintaining their credit quality and capital structure. In selecting credit securities, the credit team takes a long-term view and has a strong focus on diversification, liquidity and risk.

We believe in a balanced approach to fixed income, rather than one single strategy, allowing us to take advantage of opportunities in all parts of the fixed income markets.

We identify current conditions, how they are likely to change and the risks of this outcome not eventuating to determine how to best exploit the market using a variety of strategies prevalent at the time and expectations of changes in the future. The ability to use duration, curve positioning, sector rotation and other trading strategies ensures that excess returns can be generated from multiple sources in all market conditions.

Investment team
Managing over $15 billion in funds on behalf of its clients,Tyndall’s seven-member fixed income team has an average of 16 years’ experience in fixed interest investment.

Tyndall’s fixed income capabilities include:

• Cash
• Enhanced cash
• Domestic and international fixed interest
• Credit
• Mortgages
• Inflation linked bonds
• Diversified bond funds.