Fund overview
Launched in November 2011, the Royal London International Government Bond Fund is an actively managed and globally diversified portfolio of government bonds. The fund invests primarily in non-Sterling denominated government bonds, with foreign currency exposure hedged back to Sterling. The fund is benchmarked against the JP Morgan Traded World ex-UK Government Bond Index.
Manager
George Henderson is the lead manager for the fund and he is supported by a skilled and experienced team. He additionally manages the Royal London Global Index Linked Fund and the Royal London Overseas Bond Pooled Pension Fund.
George joined the RLAM team in 2003 and specialises in government bond markets, both in the UK and overseas. He has a background in portfolio analysis and performance measurement, gained at InTech Asset Consulting and has a Masters in Business Studies from the University of Otago (New Zealand). He became a CFA Charterholder in 2004.
Investment approach
The Fund is managed using a combination of top-down analysis combined with bottom-up security selection. The process starts with macroeconomic analysis covering all major regions and focusing on key variables such as growth rates and inflation. This enables us to formulate our outlook scenarios, including long-term yield and interest rate forecasts, which underpin our investment strategy and help determine asset allocation and duration/yield curve positioning. This strategic outlook is complemented by tactical views which may reflect shorter term considerations such as technical analysis, relative valuation anomalies, market momentum and supply considerations.
At the micro level, the selection of individual government bonds is driven by our economic views and an assessment of value based on our 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 combination with important stock specific factors.
We look to add value through multiple sources in a variety of markets, believing that skilled investors are able to add value through bottom-up stock selection, as well as exploiting the top-down macroeconomic drivers which influence global government bond markets.
Embedded within our approach is a disciplined risk framework which allows our investment team to build portfolios where the size of active positions is consummate to the level of conviction we have in an idea. In this way, we ensure risk is focused on areas of the market where we see most value.