Short Duration Credit Fund


Fund overview

The Fund aims to offer income with some capital growth from a portfolio comprising mainly of short dated corporate fixed interest securities. The Fund may also invest in floating rate notes, money market securities and gilts as the manager deems appropriate.

Fund manager

Paola Binns is a Fund manager on the Fixed Interest Team and is responsible for the management of corporate bond portfolios. She brings over 30 years' experience in bond markets to RLAM, having joined in August 2007 from Credit Suisse Asset Management where she was responsible for managing sterling credit assets. Paola has developed a strong track record across a wide range of bond asset classes having held a number of roles specialising in European corporate bonds, government bonds and Emerging Market debt. Paola has an MA degree in History and Spanish Literature from Oxford University.

Investment approach

The Fund is managed using a combination of top-down analysis, based on the macroeconomic views of RLAM's Fixed Interest Team overlaid with bottom-up security selection. At the macro level, the process starts with a quarterly economic review which covers all major economic regions and focuses upon key variables such as growth rates and inflation. This meeting is also used to formulate outlook scenarios, including short-term, medium-term and long-term yield and interest rate forecasts which underpins the manager's investment strategy.

Moving to the micro level, the selection of individual bonds is driven by the team's economic views and an assessment of value. To achieve this the manager uses a proprietary relative value model. The output from this model is reviewed daily and used alongside other regression based models to assist with the selection of individual bonds. In addition, vitally important stock specific factors are considered. Overall, the manager aims to construct diversified portfolios with the potential to deliver consistent alpha from multiple sources.

Product Risk Warning

Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. Unlike the income from a single fixed income security, the level of income (yield) from a fund is not fixed and may go up and down. For funds that use derivatives, their use may be beneficial, however, they also involve specific risks. Derivatives may alter the economic exposure of a fund over time, causing it to deviate from the performance of the broader market. This fund can invest more than 35% of its value in government securities.

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