Research house van Eyk’s multi-manager Blueprint Diversified Income Fund (BDIF) has boosted its exposure to diversified credit strategies and cash at the expense of sovereign bond funds.
The move was made after van Eyk said sovereign bonds appeared “vulnerable to price falls” in anticipation of significantly tighter monetary policies in Europe and North America.
“Van Eyk believes the outlook for sovereign bonds appears negative in 2010. Van Eyk believes it is likely that policy support for the global economy by governments and central banks will be gradually withdrawn over the coming year,” van Eyk said.
The BDIF trimmed its holdings in sovereign bond funds including Macquarie Index Linked Global Bond to 15 per cent from 27.5 per cent, and Macquarie True Index Australian Fixed Interest to 10 per cent from 17.5 per cent.
The fund’s allocation to Putnam Worldwide Income was also reduced to 15 per cent from 20 per cent.
The BDIF boosted its exposure to diversified income funds including the AXA Wholesale Diversified Yield to 15 per cent from 5 per cent and Macquarie Income Opportunities to 20 per cent from 15 per cent.
The fund’s allocation to the Schroder Fixed Income Fund was also hiked to 14 per cent from 9 per cent. The Macquarie Treasury Fund, a cash management trust, gained a 5 per cent mandate.
“While the narrowing of credit spreads from extremely elevated levels has decelerated, diversified managers are still likely to benefit from opportunities arising from sector and security dispersions in investment-grade credit markets,” van Eyk said.
“In order to increase the defensiveness of the fund, van Eyk has also recommended an increased exposure to cash.”
BDIF has $167.1 million in funds under management.
The BDIF gained 8.66 per cent in 2009, compared with a 4.85 per cent rise in the fund’s strategic asset allocation weighted benchmark.
