Fund overview
The Royal London Enhanced Index-Linked Pooled Pension Fund gives pension funds the flexibility to invest in a wider range of inflation linked assets. The fund invests primarily in UK index-linked government bonds but the manager may hold other securities such as conventional UK gilts, overseas government bonds and corporate index linked debt. The fund may be suitable for pension funds seeking active returns from UK index linked gilts but who wish their manager to be active in seeking other value added opportunities outside the narrow confines of the benchmark. The risk profile of the fund is generally higher than that of Royal London Index-Linked Pooled Pension Fund.
The fund is benchmarked against the FTSE A Index-Linked Over 5 Year Gilt Index, and aims to outperform this index by 1.30% per annum, gross of fees, over rolling 3-year periods within a risk controlled framework.
Manager
Craig Inches is the fund's lead manager, working closely with RLAM's Head of Government Bonds, Paul Rayner. He is supported by a skilled and experienced team.
Craig joined RLAM in 2009 after an eleven year career at Scottish Widows Investment Partnership (SWIP) where he was Fixed Income Investment Director. Craig has an MSc in Investment Analysis from Stirling University.
Investment approach
Our approach to managing index-linked bonds stems from our core belief that skilled investors like RLAM are able to add value through multiple sources. We focus on both bottom-up stock selection opportunities, as well as exploiting the top-down macroeconomic drivers which influence government bond markets.
RLAM’s quarterly economic review forms the bedrock of our government bond investment process. This covers all major economic regions and focuses upon key variables which may affect real and nominal yields. Through this analysis we establish our key views relating to 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.
Embedded within this 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 focussed on areas of the market where we see most value, and portfolios are built with the risk and return objectives of our clients in mind.