Macquarie Enhanced Fixed Interest Fund reaches $A1 billion

10 February 2003

LONDON - Growing interest in enhanced fixed interest investing in Australia has seen one of Australia’s leading fixed interest managers, Macquarie Funds Management (MFM), reach more than $A1 billion (£362m) in the Macquarie Enhanced Fixed Interest Fund this week, bringing the total fixed interest funds under management in this style to more than $A2bn (£725m).

In passing this milestone the fund has reached the scale of a number of Macquarie’s other pooled fixed interest funds including the Australian Fixed Interest Fund ($A1.3 billion or £471m), the Macquarie Treasury Fund ($A1.5 billion or £544m) and the Diversified Treasury Fund ($A1.2 billion or £435m). Of the $A1 billion (£362m) in the Enhanced Fixed Interest Fund, more than $A550 million (£199m ) came in the12 months to December 2002.

“We’ve certainly seen a surge in interest in this style of investing,” Macquarie Funds Management Division Director and portfolio manager Dean Stewart said.

However, Mr Stewart warned that investors need to look closely when selecting an enhanced fixed interest fund to meet their requirements.

“The ability to maintain a consistent  true-to-label, low risk performance is the key factor for investors choosing an enhanced fixed interest investment,”  he said.

The Macquarie Enhanced Fixed Interest Fund aims to deliver returns that are better than the UBS Warburg Australian Composite Bond Index with very little additional risk. It invests across the full range of high quality Australian fixed interest securities including government, semi-government and high grade corporate bonds.

“Since its launch in 1998, the Fund has consistently delivered at the top of the target range for our clients and has done so with the best risk-return trade off in the market. We do this by taking small, smart and consistent risks, which minimises any volatility in the Fund,” Mr Stewart said.

In research released last year, Mr Stewart identified that not all enhanced fixed interest approaches were able to maintain a low-risk profile.

“Some styles can potentially wipe out an entire year’s targeted outperformance in just one month,” he said.

Mr Stewart said that ongoing research had been central to the development of enhanced fixed interest investing at Macquarie Funds Management.

Macquarie Funds Management is one of the most experienced managers in the Australian fixed interest market, having launched its first fixed interest fund in 1985. It offers investors the full spectrum of styles and products in fixed interest and currently manages $A2 billion (£725m) in enhanced fixed interest (both Australian and international) and $A2.5 billion (£906m)in active fixed interest (both Australian and global).

Notes to Editors
Macquarie does not currently offer enhanced fixed interest products in Europe. Macquarie Funds Management offers enhanced equities products to UK institutional investors, offering low risk investment in UK equities that aims to deliver returns consistently above the FTSE All Share Index. Worldwide Macquarie Funds Management has over 20 years experience and £10.5 billion in funds under management.

Macquarie Funds Management is part of the Macquarie Bank Group, a specialist provider of investment, advisory and financial services in select markets around the world, with 4700 people in 18 countries. Macquarie has 200 staff based in London, with additional offices in Dublin, Frankfurt, Geneva, Munich and Vienna.

For further information, please contact:

Alison Jefferis
Corporate Communications
Macquarie Bank
Tel: +44 (0)20 7065 2335
Mob: (0)79 1938 2958

Louise Dolan
Financial Dynamics
Tel: +44 (0)20 7269 7192
Mob: (0)7884 238344