Fixed interest


Fixed income, not fixed thinking

RLAM’s fixed income team has developed a reputation as one of the UK’s leading managers of sovereign and corporate bonds, offering a range of pension products and OEICs. The team adopt a collegiate process focused on identifying valuation opportunities by using their in-depth market knowledge to explore a wider range of investments than many of their peers. It is the experience and skill of our fund management team that set us apart, giving us an edge in a highly competitive market. 

Quite simply, by using our experience and exploring parts of the market that others overlook, we aim to add value for our clients. 

Good people

The quality of our team is the key driver of our success. Our 28 Fund managers and Analysts have an average of 17 years’ investment experience and this brings the confidence to maintain non-consensus positions where we have strong opinions. We have a tradition of independent thinking, using our own analysis to uncover the best investment opportunities.

Robust process

Our processes have proved to be robust in a wide variety of economic and market situations. We manage £52.8bn of fixed interest assets (as at 31.03.2018). We target multiple sources of outperformance (such as yield curve positioning, duration management and stock selection) for our clients.

Government

We believe that government bond markets are relatively efficient, but as active fund managers we can exploit valuation anomalies as they occur, particularly in light of the unprecedented conditions we have seen under Quantitative Easing. Our managers look widely for their government bond opportunities and are active in using global bonds (currency hedged) in sterling portfolios. We believe that risk control is central to government bond management and, therefore, we run a range of investment strategies, rather than relying upon one significant investment position. Investors looking for a more global orientation are catered for by our global government bond funds (both conventional and index linked) which employ the same management processes as our sterling funds.

We offer a range of government strategies: UK gilts, UK index linked gilts, cash plus, overseas government, overseas index linked and bespoke LDI. 

Credit

In comparison, the credit market is less efficient. By considering a wider investment universe than many of our competitors – including unrated and asset backed bonds and loans – we can uncover value in many, often overlooked, areas. In both the investment grade and high yield markets we are value investors. In practice this means that we emphasise our own research and that we prefer companies with sound long term business models and bonds which offer strong covenant protection and asset backing. We believe that credit ratings are a lagging indicator and that bond investment is about assessing the probability of default and the recovery rate; we firmly believe that the credit markets are inefficient because too little emphasis is placed on the latter.

We now offer a range of credit strategies: sterling investment grade, sterling ethical bond, duration hedged sterling credit, European investment grade, investment grade Buy & Maintain, bespoke cashflow matching, sterling higher yield (through our award winning Sterling Extra Yield Bond Fund) and global high yield.