European 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 sterling fixed interest assets. It is a predominantly investment grade Fund and represents an effective way of accessing the full skills and experience of RLAM’s fixed interest team in a single investment vehicle. The Fund invests mainly in high quality euro denominated credit bonds although the manager can also invest a portion in other securities.

Fund manager

Rachid Semaoune joined RLAM in February 2015 as a Credit Fund Manager within the Fixed Income Team. Rachid joined from UBS Asset Management where he spent three years managing investment grade credit portfolios. Prior to this he was a Deputy Credit Fund Manager at Old Mutual Asset Management. Rachid began his investment career in 2001 at Gulf International Bank where he worked as a Credit Analyst and Deputy Fund Manager. Rachid studied for a PhD in Physics at Imperial College London and holds a Postgraduate Degree in Laser Physics from the Université Paris 13.

Investment approach

The Fund is managed using the disciplined credit investment process used across our Fixed Interest Team, focused on security selection combined with top-down macroeconomic analysis. The team's value-orientated approach seeks to exploit the inefficiencies within credit markets, especially within higher yielding bonds further down the credit spectrum. At the macro level, analysis starts with a quarterly economic review which covers all major economic regions and focuses upon key variables such as growth rates and inflation.

This meeting is also used to formulate outlook scenarios, including long-term yield and interest rate forecasts which helps to shape the investment strategy. Moving to the micro level, internal research is undertaken on companies, which is supplemented by research from rating agencies and brokers. The team's internal rating methodology looks not only at the probability of default (where credit ratings agencies place their focus) but also the protection offered to investors (covenants and security). A number of company visits are undertaken to help us assess the quality of companies invested in within our portfolios. Overall, the team aim to construct diversified portfolios that will deliver consistent alpha from multiple sources.

Product Risk Warning

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.