Recovery and returns with Australian corporate bonds

Published 11 August 2020

LGIAsuper has increased its stock of investment grade Australian corporate bonds, which can help fund the economy’s recovery while delivering good returns for our members.

Some of Australia’s largest employers can raise much-needed capital through corporate bonds to help them to recover from the COVID-19 slowdown. Our investment is helping them, the economy, and our members.

With an investment grade rating, this type of bond is considered relatively low risk by external rating agencies. They tend to be less volatile than share market investments and can deliver higher returns than government bonds.

Supporting Australia’s recovery

LGIAsuper CEO Kate Farrar said superannuation funds had a role to play in helping the Australian economy recover from the impacts of COVID-19.

“At a time when the availability of capital is a challenge for businesses and the banks are clamping down on providing credit, superannuation funds can help in a very important way,” Ms Farrar said.

“Businesses need capital to survive through COVID-19, to strengthen their balance sheets, and position themselves for a solid recovery. This investment strategy is a way to provide Australian businesses with much-needed capital to support them through the coronavirus pandemic and beyond.”

Generating returns for members

Ms Farrar said the strategy was also designed to generate returns for members.

“The interests of our members are at the heart of every investment decision we make at LGIAsuper,” Ms Farrar said.

“Many people are worried about their financial security and what the future will bring, particularly retirees and pre-retirees, and LGIAsuper has a long history of delivering returns and riding out the volatility of international markets. 

“The opportunity in investment grade corporate bonds has strong benefits for all parties involved and we expect attractive, low risk returns over the coming 18 months of up to 5% above pre-pandemic levels. 

“By providing capital in this way, LGIAsuper is doing well for its members and helping the economy.”

For more information about LGIAsuper’s investment strategy, please contact us on 1800 444 396 or info@lgiasuper.com.au.