AMP Says Bonds No Longer a Hedge, Cuts From Some Pension Funds
Yahoo Finance ·
AMP Says Bonds No Longer a Hedge, Cuts From Some Pension Funds Richard Henderson Thu, July 2, 2026 at 11:07 PM EDT 2 min read AMP.AX GOOG AAPL (Bloomberg) -- AMP Ltd., one of Australia's top asset managers, has ditched bonds from some of its retirement funds with sovereign debt no longer offering the diversification investors have relied on for decades as a ballast against stock volatility. Exxon to Change Name for First Time in Decades After Redomicile Germany Rejects Trump's Demands for NATO Loyalty to Washington Meta Is Planning a Cloud Business to Sell AI Computing Power Russia Indicates Ukraine Fired Long-Range Ballistic Missile Why the Great American State Fair Looks So Empty The fund manager, which oversaw A$162 billion ($112 billion) as at February, no longer holds the securities in its retirement portfolios for younger investors and has cut allocations across other funds over the past six to 12 months, according to Chief Investment Officer Anna Shelley. Instead, it has shifted toward corporate credit while seeking greater exposure to commodities and agriculture to better diversify portfolios. AMP's stance reflects a growing shift among institutional investors that are questioning the role of bonds in portfolios, as elevated inflation erodes their value over time and the higher correlation to stocks reduces their ability to cushion equity losses during volatile market downturns. "The main thing that we've done in recent times is to really reduce our weightings to government bonds," Shelley said in an interview on Thursday. The move has been driven by views inflation will remain elevated, underpinning concerns "that we're in a long-term, structurally difficult market for bonds — and we're not convinced that they will provide the diversification benefits," she said. Read: Bonds Are Useless Hedge for Stock Losses as Correlation Jumps Cutting government bond exposure has also helped finance overweight positions in global equities, Shelley added, contributing to an 11.3% return for AMP's MySuper 1970s portfolio, one of its largest retirement funds, for the year through June 30. Listen and follow The Bloomberg Australia Podcast on Apple, Spotify, YouTube or wherever you get your podcasts. AMP is not alone. The Future Fund, Australia's sovereign wealth fund, said in 2024 it would look to hedge funds rather than sovereign debt to offset equity risk, while Colonial First State has also broadened its fixed-income allocations beyond government securities. "Traditional defensive assets aren't actually acting defensively anymore and that's connected with the challenges around government budget deficits," Jonathan Armitage, chief investment officer for Colonial First State, said. CFS delivered a 12.7% return for its growth-focused MySuper Lifestage 1975-79 fund for the year through June, a gain helped along by "exposure to private debt and other forms of fixed income" including catastrophe bonds and asset-based finance, Armitage added. The Fun Shortage Is Real, and It's Making America Miserable Spain Built Too Much Solar. Investors Want Out The Wall Street Women Who Traded Finance Careers for Influencer Success 'Southern Squeeze' Grips US Cities Once Known for Affordability Porsche and Other Luxury Car Icons Are Losing Appeal in China
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