The specialist managers selected for this portfolio invest in income-yielding fixed-interest instruments such as money-market instruments, bonds and inflation-linked bonds. Money-market instruments generally have maturity dates shorter than one year and bonds longer than one year. The assets in the portfolio will consist mainly of shorter-dated bonds between one and three years. The managers are given specific mandates aimed at providing income and some capital growth. Relative to single manager income-only portfolios, this portfolio is expected to have lower volatility of returns over the medium term due to the nature of its construction.
The portfolio is aimed at investors with a short- to medium-term investment horizon (three years). Investment Solutions expects:
* A low probability of capital loss over the short to medium term
* Investment returns above inflation over the medium to longer term