This global income fund is not afraid to shift gears fast

Please note, this interview was filmed 31st July, 2025.

When it comes to generating income in today’s market, flexibility is everything. And that's what the new Allspring Global Income Fund, launched in partnership with Bennelong, is designed to deliver.

Allspring Global Investments senior portfolio manager, Mike Schueller, describes it as a global multi-sector fund that can invest anywhere from US Treasuries and European corporate bonds to emerging market debt.

The goal is "searching for dislocations” across the world’s bond markets and turning them into reliable income streams.

This broad flexibility allows the fund to seek out mispriced opportunities worldwide to generate attractive income while providing a solid diversifier alongside more equity-focused portfolios.

What sets the fund apart, though, is its six-month outlook, focusing on opportunities in the near term rather than the long term. Instead of waiting years for a thesis to play out, the fund adapts quickly as markets shift - a significant advantage in today’s unpredictable environment.

For a deep dive into the fund and its design, watch the interview above, or read the interview summary below.

INTERVIEW SUMMARY

Short-term outlook, long-term impact

Unlike many funds that set positions based on years-ahead forecasts, this one plays a different tactic. Schueller says the team’s edge is focusing on what’s most likely in the next six months.

“It’s not that we ignore the future or the longer-term horizons,” he explains, “it's just that we think this is the best way to create a higher conviction portfolio because there are fewer things that we have to get right within the next six months.”

Managing the fund is a team of six portfolio managers, each with deep expertise in a specific sector of global fixed income. Each manager brings specialist knowledge to the table, supported by sector-focused analysts. Schueller’s own focus lies in US high yield.

That structure means the team can uncover opportunities that broader approaches often miss. 

“Security selection has been a core part of our process for decades,” says Schueller.

By finding those “idiosyncratic opportunities,” the fund aims to generate returns in a way that’s more repeatable than betting heavily on interest rate moves.

How the fund is positioned now

Schueller says they’ve lengthened duration to 4.25 years, anticipating slower growth and a potential Fed rate cut or two before the end of 2025.

At the same time, they’re short the long end of the US Treasury curve, positioning for the risk of higher long-term yields thanks to stubborn fiscal deficits and lingering inflation. 

“In other words, investors need to get paid a little bit more to take that risk,” says Scheuller

Corporate credit, particularly high yield, looks too expensive right now. “Spreads in the United States and Europe are close to as rich as they’ve ever been,” Schueller notes. Instead, the fund has pivoted towards US agency mortgage-backed securities, which offer quality, income, and better value.

A 6% yield without stretching for risk

One of the biggest drawcards is the yield: the fund currently pays around 6%, well above the benchmark.

But Schueller insists that doesn’t mean taking reckless bets. A large allocation to agency mortgage-backed securities delivers attractive income, while moving corporate credit exposure into shorter-dated bonds helps keep volatility low. 

“It maintains exposure to investment grade corporates, but a much less risky and lower volatility portion of that market until we have better opportunities to reallocate portfolio assets."

The result is a portfolio that’s built to weather turbulence while still delivering strong, consistent income.

Why this fund makes sense now

Yields today look very different to the post-GFC era. As Schueller points out, “We have much higher yields in the US, anywhere from four point a half to 6%, and we think that offers a really attractive income stream that provides enough yield to offset volatility.

Coupled with the ability to move quickly when markets shift, the Allspring Global Income Fund is built to capitalise on inefficiencies that many investors can’t access on their own. Schueller sums it up: 

“Global fixed income markets are highly segmented. We think that creates persistent inefficiencies. Our process and philosophy is designed to take advantage of those inefficiencies, and we can do that very quickly - much more quickly than an investor can do on his or her own."