Charlotte Vincent, co-head of fixed income at People’s Pension, is the latest guest on The Professional Investment Podcast. She chose the FT’s story that the Iran war inflation shock is set to fall short of the 2022 surge.
Charlotte explains she is always looking at inflation and its impact on fixed income assets as it is important to generate real returns for scheme members to ensure they have a good retirement.
We discussed People’s Pension’s approach to fixed income and how they choose to make their portfolio dynamic when they appointed Invesco as their fixed income manager in February last year.
Charlotte unpacks how the fund can change multiple aspects of the fixed income portfolio including the regional exposure, the duration of the portfolio, the mix between sovereigns and corporate.
She talks about the benefits of their £250m collateralised-loan obligation portfolio and how helpful the floating rates have been in this very volatile fixed income environment.
People’s recently split out the fixed income portfolio for its members in the growth part of their journey and those in the pre-retirement part of the journey. That has allowed them to tailor the fixed income investments to the very different requirements of these two cohorts.
Finally, the two Charlottes discussed who will be the future buyers of UK gilts as closed defined benefit pensions wind down. Chalotte Vincent mentions a recent FT Alphaville article which suggested issuing more short-dated government debt.
We finished our discussion pointing out the growing demand for global credit from both insurers and auto-enrolled workplace schemes and asked what can be done to encourage both the UK and European markets to increased fixed income securitisation.
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