UK Long Corporate Bond Fund


Fund overview

The Fund aims to achieve a combination of income with some capital growth by investing across a broad range of long dated sterling fixed interest assets, including unrated bond and sub-investment grade bonds. The Fund invests mainly in sterling credit bonds although the manager can hold other securities government bonds, short / medium dated bonds, index linked securities, non-sterling credit bonds and floating rate notes when thought appropriate. 

Manager

Paola Binns is a Fund Manager on the Fixed Income 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

Central to the investment process is our belief that fixed interest markets offer inefficiencies that can be exploited by our experienced team. The Fund aims to achieve outperformance from multiple sources (e.g. asset allocation, stock selection, duration and yield curve management as well as off-benchmark investing). 

Asset allocation and duration / yield curve positions are derived from our quarterly economic review in which we assess key economic factors such as growth, inflation, interest rates. Stock selection reflects the views of RLAM’s experienced credit team; the process is underpinned by a core investment philosophy of favouring “covenants, structure and security”. This means that we do not rely just on credit ratings; a key question for us is: “are we getting sufficient reward for the risk we are taking?”. In practice this means that we hold credit bonds that are excluded from  the credit benchmark (e.g. unrated bonds, short / medium dated bonds, smaller issue size bonds, sub-investment grade bonds and non-sterling bonds) where we believe that valuations are attractive. Our approach allows us to focus on investing for the longer-term.

The Fund will differ from benchmark weightings when we have strong investment views. Asset allocation, interest rate views and stock / sector selection will be the key risks within the fund. We firmly believe in credit diversification as a way of reducing single name credit risk.

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.