Fund overview
The Royal London Sterling Extra Yield Bond Fund invests in a broad range of fixed interest securities, including investment grade, sub-investment grade and unrated bonds. This combination provides higher yield without taking the degree of risk we believe is generally associated with high yield funds. It may also hold other transferable securities as well as units in Collective Investment Schemes and cash. The fund was launched in April 2003 and has been managed by Eric Holt since launch. The fund seeks to achieve a gross redemption yield of 1.25 times the gross redemption yield of the FTSE Actuaries British Government 15 Year index, although the fund itself is not benchmark constrained.
Manager
Eric Holt joined Refuge Assurance’s investment team in 1979, having been initially recruited into the Actuarial department. He became RLAM's Head of Credit following the merger of the two companies in 2000. Eric has overall responsibility for RLAM’s credit research and investment process and has extensive knowledge of UK investment grade and high yield corporate bonds. He is a graduate of Nottingham University with a degree in mathematics and is an Associate of the Institute of Actuaries.
Investment approach
The fund is a well diversified, value oriented bond fund that aims to exploit credit market inefficiencies by investing in a combination of investment grade, sub-investment grade and unrated bonds. The manager uses his considerable experience of researching and investing in a broader credit universe than many other bond managers, enabling him to source bonds with strong covenants and that are usually secured i.e. backed by a charge on specific assets. The manager and team analyses all aspects of the interest rate risk within the fund and position it to reflect our interest rate views. Duration and yield curve positions will be important determinants of return within the fund.