After years in the shadow of flashier asset classes, bonds are commanding fresh respect from Australia’s most sophisticated investors. JBWere’s Laurie Conheady explains why the least glamorous corner of a portfolio may now be the most important—by Cameron Cooper.
There is a certain type of investment that has never attracted the cult following of cryptocurrency or the cocktail-party cachet of private equity, instead spending much of the past decade being politely overlooked. Government and corporate bonds have long been the wallflowers of the wealth management world—reliable, predictable, quietly compounding in the background while equities and alternatives commanded the spotlight.
But as geopolitical fractures deepen and artificial intelligence reshapes capital markets in ways that remain difficult to price, investors with substantial wealth are rediscovering the strategic value of predictable income. What was once considered mere portfolio ballast is now being recognised as something rather more compelling: a source of stability with genuine return potential.
JBWere, leaning on heritage stretching back more than a century, has been positioning for precisely this shift. In late 2024, it launched two co-branded funds with UBS spanning Australian and international credit for wholesale investors seeking well-managed defensive assets at a time when even the most bullish market participants are hedging their optimism.
FROM THE WINGS TO CENTRE STAGE
Laurie Conheady, executive director and head of fixed income at JBWere, is clear-eyed about the renewed appetite for fixed income. “Higher interest rates have been a gift to bond investors,” he says. “It is now possible to generate meaningful income without taking on outsized risk—something that simply wasn’t available in the post-COVID zero-rate environment.”
The appeal is not merely cyclical. The Australian credit market has undergone a structural expansion in recent years, with record issuance, new domestic and offshore entrants, and the development of instruments such as subordinated corporate notes creating a more liquid and diverse landscape. Growing interest from superannuation funds, private wealth firms and Asian institutional investors suggests the trend may persist. Conheady notes that while demand for fixed income often peaks during periods of volatility, the case for maintaining consistent exposure is far more enduring. “This is not about retreating to safety. It is about building portfolios that are genuinely resilient and perform across market cycles, not just in benign conditions.”
JBWere’s commitment to the asset class is not recent. The firm established a dedicated fixed-income research team more than a decade ago, alongside a specialised markets desk. Today, it manages $17.6bn in fixed-income assets, of which $12.7bn is direct wholesale and listed market securities. This scale positions it as a significant participant in domestic credit markets and provides clients with access to wholesale deals that would otherwise be beyond reach.
THE PERSONAL TOUCH
One of the more notable shifts Conheady has observed is the desire to hold bonds directly rather than exclusively through managed funds. “Investors are seeking greater control and transparency over what they own,” he explains. “An increasing number are allocating capital directly into individual securities and supplementing where appropriate with managed funds and exchange-traded fund exposures.”
This is where the breadth of the JBWere network becomes a distinguishing factor. Conheady describes it as “optionality of exposure” whereby investors who want direct market access can draw on JBWere’s research and execution capabilities, while those who prefer a managed approach can tap into a curated panel of approved fund managers covering domestic and global fixed-income markets, both public and private.
The level of sophistication extends to the analytical tools on offer. JBWere will soon be able to access BlackRock’s Aladdin platform, the institutional-grade risk engine used by many of the world’s leading asset owners, for enhanced insight into fixed-income positions within the overall portfolio.
NAVIGATING THE AI QUESTION
No conversation about credit markets in 2026 can avoid the artificial intelligence question, and for fixed income investors, the implications are particularly nuanced. Technology giants including Amazon and Oracle are tapping bond markets for well over US$100bn to fund data centres and AI infrastructure, a borrowing spree that has created both opportunity and a note of caution.
“These companies are borrowing heavily to pursue the AI opportunity,” Conheady observes. “The fundamental question is whether their traditional cash-generating businesses can support this scale of capital expenditure. Core operations remain robust for now, but commitments of this magnitude could meaningfully reduce near-term cash availability and debt service capacity.”
The creditworthiness of these issuers depends on their existing revenue engines continuing to fire even as they pour enormous sums into infrastructure with uncertain returns. It is a space that rewards careful credit analysis, and one where JBWere’s research capabilities come into their own.
BUILDING FOR WHAT COMES NEXT
Conheady acknowledges that inflation remains a live consideration, though he notes that central banks are better equipped to manage it today than they were during the post-pandemic surge, when supply-chain disruptions and unprecedented fiscal stimulus complicated the policy response. Encouragingly for bond investors, recent rises in yields mean that parts of the fixed‑income market are now offering yields above current inflation and some measures of expected inflation (as at March). This may help support purchasing power, though outcomes will depend on both the path of inflation and issuer‑specific credit risks.
JBWere’s current strategic positioning reflects this environment. “Our approach favours quality credit over government bonds, incorporating a balance of floating-rate and inflation-linked securities alongside fixed-rate assets where appropriate.” Conheady explains. In practical terms, floating-rate instruments adjust their income payments as interest rates move, which can help reduce interest‑rate sensitivity if rates rise, while inflation-linked bonds may help shield real returns from rising prices. Meanwhile, the portfolio may have the potential for capital appreciation should inflation moderate and yields subsequently fall. It is a structure intended to pursue performance across multiple scenarios rather than relying on a single outcome.
While JBWere’s equity portfolios maintain exposure to long-term AI-related themes (including semiconductor companies through its International Equities Model Portfolio), the firm’s asset allocation team has recommended a measured tilt toward fixed income for risk-management purposes. It is, Conheady suggests, a prudent response in an environment where the range of possible outcomes remains unusually wide.
THE CASE FOR CONSISTENCY
Conheady’s outlook for the period ahead is characteristically pragmatic, circling back to the quiet appeal that has drawn investors to this asset class throughout its history. Fixed income may never generate the adrenaline of a surging equity market or the allure of an alternative investment, but for portfolios of genuine scale, its role has never been more important or rewarding.
“Do not try to time the market but do not ignore what it is telling you either,” Conheady counsels. “Right now, the message is clear: the least glamorous part of a portfolio may well be the most valuable.”
The information contained in this document has been prepared with the permission of JBWere Limited ABN 68 137 978 360 AFSL 341162 (JBWere). The information contained in the article is believed to be reliable as at March 2026 and is subject to change without notice. JBWere is a wholly owned subsidiary of National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 (NAB). NAB does not guarantee its subsidiaries’ obligations or performance or the products or services its subsidiaries offer. JBWere is not an authorised deposit-taking institution, and its obligations do not represent deposits or other liabilities of NAB. You are subject to investment risk, including loss of principal invested. JBWere and their respective related entities and each of their respective directors, officers and agents believe that the information contained in this document is correct and that any estimates, opinions or conclusions contained in this document are reasonably held or made as at the time of compilation. However, no warranty is made as to the accuracy or reliability of any estimates, opinions, conclusions or other information contained in this document. Any information contained in the article is intended to be of a general nature only. It has been prepared without having regard to or taking into account the investment objectives, financial situation or particular needs (financial circumstances) of any particular person. Accordingly, before acting on any information contained in this article, you should assess whether the advice is appropriate in light of your own financial circumstances. Past performance is not a reliable indicator of future performance. Any target returns, projections or forward-looking statements are not guaranteed and are subject to change.