“The Higher Income Fund plays an opportunity set of roughly about $1.8 trillion: much, much larger than most other credit funds that are siloed in Australian credit,” says Strano.

What that means for investors is that the fixed income team is “focusing on risk-adjusted returns, being able to provide genuine liquidity to investors, and picking the eyes out of the market, whether that be across public or private in appropriate allocations means that you tend to perform or generate better returns for the risk through a cycle.”

“We have a unique ability to mesh the best bits of private and public markets to generate an optimal blend of risk return and liquidity for investors focusing purely on risk-adjusted returns.

So only buying any assets that kind of make sense and compensating us for the risk that we’re taking.”

Right now, that means returns to rival historical equity returns.

“We’re pretty comfortable that, certainly in 2025, we’re well on track to deliver circa 7-8%,” says Strano.

That’s in line with their net return hurdle of the cash rate plus 335 basis points.

Yarra Higher Income Fund performance vs RBA cash rate

“The beauty of this market right now is that over a 12-month period is incredibly improbable that you’ll see [negative returns] purely because running yields are so high, but also our ability to limit drawdowns through our strategic use of interest rate duration when it makes sense to do so,” says Strano.