Manulife launches liquid alternative funds, aiming to lower volatility and capitalise on currency plays
In an article by Wealth Professional in partnership with Manulife Investment Management, the fixed income market's current landscape is highlighted as offering new opportunities for investors.
While bond yields have faced significant volatility in recent years, Manulife's experts suggest that recalibrated yields and more controlled inflation have made fixed income an attractive option once again.
Earlier this year, Manulife launched two liquid alternative funds: the Manulife Alternative Opportunities Fund and the Manulife Strategic Income Plus Fund.
Roshan Thiru, head of Manulife's Canadian Fixed Income team, explains the goal of these funds is to offer lower volatility, lower correlation, and fewer drawdowns compared to traditional bond funds.
“We reduced our credit exposure by about 10 percent using credit default swaps, which was crucial during the stock market selloffs while rates were rallying,” says Thiru.
Christopher Chapman, who oversees Manulife's global multi-sector product line, highlights the global approach of the Manulife Strategic Income Plus Fund. This strategy targets regions where central bank policies are diverging, such as Australia and Europe.
Chapman notes, “We anticipated a deceleration in inflationary pressures, and now we’re seeing central banks across the globe begin cutting rates.”
Manulife's currency strategy also plays a role, with Chapman pointing to opportunities in regions like Mexico and Brazil, where currency fluctuations present potential gains. Active currency management has allowed Manulife to capitalise on these market dynamics.
Thiru emphasizes that, for fixed-income investors, capital preservation is key. “People invest in fixed income for capital preservation first before income generation,” he explains.
Chapman adds, “This is a once-in-a-generation opportunity for fixed income investors to not only protect their portfolios but also generate solid, positive returns.”
Manulife's fixed-income teams leverage extensive global resources to navigate the volatile market, ensuring their strategies are equipped to take advantage of the highest bond yields seen in nearly 15 years.
