Short Duration Gilt Fund


Fund Objective

The Fund’s investment objective is to achieve a total return over the medium term (3-5 years)  by investing at least 80% in short-duration  (1-5 years) UK government bonds, which are also known as gilts.The Fund’s performance target is to outperform the FTSE Actuaries UK Conventional Gilts up to 5 Years Index (the "Index") over a rolling 5-year period. For further information on the Fund's index, please refer to the Prospectus, available via the fund information section of this website.

Fund manager

The lead fund manager is Craig Inches, he is supported by deputy manager, Ben Nicholl.

Craig joined RLAM in 2009, becoming Head of Short Rates and Cash in 2016. He is responsible for the management and oversight of RLAM’s short rate strategies which include our Cash Plus and Enhanced Cash Funds. In addition Craig jointly manages the government bond strategies with Paul Rayner, Head of Government Bonds. Prior to RLAM, Craig was an Investment Director with Scottish Widows Investment Partnership. In addition to 18 years of cash and fixed income experience, Craig has an MSc in Investment Analysis from Stirling University and a BSc (Hons) in Actuarial Mathematics and Statistics from Heriot-Watt University.

 

Ben joined RLAM as a university graduate in September 2007 with a BSc in Economics from the University of York. After one year spent rotating between RLAM’s core investment disciplines, Ben spent four and half years with the Far East Equity Team as a trainee and then Junior Fund Manager. Ben then joined the Asset Allocation Team where he spent two years before transitioning to the Government Bond Team as a Trainee Portfolio Manager. Ben also holds the IMC and has passed all three levels of the CFA programme.

 

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 government bonds is driven by the team's economic views and an assessment of value. To achieve this a proprietary relative value model is used. 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

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.

Short duration bonds ezine