Fixed Interest Portfolio

The VIP Fixed Interest portfolio aims to provide a high level of income over the medium to long term through investment in a diversified portfolio of Australian fixed income securities including Government and Semi Government Bonds, Managed Funds, Term Deposits and Cash. The portfolio invests in 4 to 10 fixed income securities including Government and Semi Government Bonds, Managed Funds, Term Deposits and Cash that are managed with a bottom up approach while taking top down economic considerations into consideration. Cash flow, duration, and liquidity considerations will also play into the portfolio construction process. Finally, the potential investment are screened by risk models to ensure that diversification is maintained and investors are not exposed to unexpected levels of risk in order to generate a return which exceed the benchmark.

Investor Suitability

The VIP Fixed Interest portfolio is suitable for investors who:

  • Seek a high level of income and a minimal potential for capital growth.
  • Prefer a portfolio designed to have low turnover.
  • Want lower volatility than investments in the share market provides.
  • Understand that much of the portfolio will be invested in the fixed interest securities which have a term to maturity. This could possibly cause a delay on any request to withdraw from the portfolio.

Portfolio Literature

Portfolio Characteristics

Indicative Asset Allcoation

95% Fixed Interest Securities & 5% Cash

The VIP Fixed Interest portfolio has the capacity to invest between 0% - 98% in Fixed Interest Securities and 2% - 100% in cash. Although the Investment Committee aims to be fully invested in fixed interest securities the portfolio can hold up to 100% cash in order to properly de-risk the portfolio in cases of severe market corrections.

Portfolio Details