Macquarie's Dangerous Spin + Fixed-Income Fund Puzzle

Christopher Joye

Coolabah Capital

In The Australian Financial Review I take the sword to Macquarie Group's silly claims that it does not "speculate" in global high-yield markets after punting $33 billion on the sector and that "it has not received, and does not receive, government backing". I also uncover a fascinating investment puzzle: almost 90% of the "active" fund managers in arguably Australia's most inefficient---and thus theoretically lucrative---asset-class, domestic fixed-income, have systematically underperformed their benchmarks over the last 5 years in a manner that is far worse than mere statistical chance (see charts below). This contrasts strikingly with the superior performance of active equities managers, who have to contend with a much more transparent, efficient and heavily contested market. I propose two related explanations: (i) fixed-income managers are mostly closet index huggers and (ii) typically attract inferior human capital given their skinnier fee structures. Read free here (VIEW LINK)


1 stock mentioned

Christopher Joye
Portfolio Manager & Chief Investment Officer
Coolabah Capital

Chris co-founded Coolabah in 2011, which today runs $7 billion with a team of 33 executives focussed on generating credit alpha from mispricings across fixed-income markets. In 2019, Chris was selected as one of FE fundinfo’s Top 10 “Alpha...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.