Fund overview
The Royal London UK Long Gilt Pooled Pension Fund is an actively managed portfolio that is invested predominantly in long dated conventional UK Government bonds. The fund is benchmarked against the FTSE Over 15 Year Gilt Index and aims to outperform this index by 0.75% per annum, gross of fees, over rolling 3-year periods within a risk controlled framework. The fund will invest mainly in conventional UK government debt although the manager can hold other securities including overseas government bonds, index linked securities, non-government bonds and floating rate notes when thought appropriate. The fund is suitable for investors with a wide range of objectives, including those seeking to manage the asset liability profile of their scheme.
Manager
Paul Rayner, Head of Government Bonds, is the fund's lead manager, working closely with Government Bond Fund Manager, Craig Inches. He is supported by a skilled and experienced team of specialist investors in all disciplines employed within the Fund.
Paul joined RLAM in June 2005 from SG Asset Management where he was Head of UK Bonds. Paul has over 25 years experience in managing UK and global government bonds and is a graduate in economics from the University of Kent.
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).
Asset allocation is derived from our quarterly economic review in which we assess key economic factors such as growth, inflation and interest rates. Stock selection decisions are reached through a combination of top-down analysis based on our macroeconomic views and bottom-up stock selection. We believe that volatility in government bond markets is likely to persist and that the active manager can take advantage of pricing anomalies. We use our own pricing model to highlight attractive relative valuation opportunities in UK government bonds. Index linked bonds, overseas government debt, non-government debt and floating rate notes can be held when the manager thinks that it is appropriate.
The fund will differ from benchmark weightings when we have strong investment views. Asset allocation and interest rate views (duration and yield curve) will be the key risks within the fund.