TWUSUPER, a Melbourne-based super fund focused on Australian transport industry employees, awarded a global bond mandate to J.P. Morgan Asset Management as part of a broader revamp of the fund's A$6.2 billion ($4.3 billion) portfolio in the wake of recent industry reforms, said Edward Smith, the fund's chief investment officer.
Mr. Smith and a spokeswoman for J.P. Morgan Asset Management separately declined to say how big the mandate is.
Mr. Smith said the "Your Future Your Super" reform package passed by Australia's Parliament last year, establishing a performance test with considerable consequences for funds that fail to measure up, has left his team over the past two years "actively working to manage costs and tracking error while enhancing returns."
Toward that end, TWUSUPER is making a seed investment in the newly launched JPMorgan Global Bond Fund, a "high conviction, diversified portfolio … with multiple levers for generating performance with a risk-controlled approach," according to a JPMAM news release.
Andrew Creber, the Sydney-based CEO of J.P. Morgan Asset Management's business in Australia and New Zealand, said in an email that the new fund, which is benchmarked against the Bloomberg Global Aggregate index that all international fixed-interest subasset classes will be marked against under the YFYS reforms, will take advantage of relative-value opportunities.
While the fund is new, the strategy has a track record that over a decade marked by periods of volatility, including the taper tantrum of 2013 and the COVID-19 pandemic turmoil of 2020, "only experienced three quarters in which excess returns were lower than 50 basis points," Mr. Creber said.