Monthly Income Bond Fund

Fund overview

The fund aims to provide income in excess of the reference benchmark, net of fees, with the potential for capital growth over the medium to long term.  For all shareholders, any income will be paid monthly.

The fund will seek to achieve this objective by investing primarily in collective investment schemes. Through these funds, the fund will be invested into fixed income securities issued by companies, governments and other institutions as well as in cash, other money market instruments and deposits.

The fund is a fund of funds, and will invest up to 100% in funds managed by Royal London Asset Management. At the Fund Manager’s discretion the fund can invest in other collective investment schemes and directly held securities. Direct holdings will be limited to a maximum of 30% of the Fund.

Fund managers

Lead managers Jonathan Platt and Richard Nelson are supported in the day to day management of the fund by our entire team of fixed income experts. In particular, asset allocation expertise and governance is provided by Eric Holt (Head of Credit), Azhar Hussain (Head of Global High Yield) and Ewan McAlpine (Senior Client Portfolio Manager).

Jonathan joined the Royal London Group in 1985 and became Head of Fixed Interest in 1992. Jonathan has been instrumental in overseeing the development of the fixed interest process and remains committed to the management of client portfolios. Jonathan has an MA degree in Philosophy, Politics and Economics from Oxford University.

Richard joined RLAM’s Fixed Income Team as part of the Co-operative Asset Management (TCAM) acquisition on 1 August 2013. He joined the Co-operative Insurance Society as a trainee actuary in 1994, before moving into asset management in 1997 where he helped run the cash and treasury function from 1999. He has been managing government bonds since 2000 and corporate bonds since 2005. Richard qualified as an actuary in 2003 and holds a degree in Mathematics & Statistics from Exeter University.

Investment approach

The Royal London Monthly Income Bond Fund offers access to the income generation expertise of RLAM’s fixed income team in a single vehicle. As a fund of funds it invests principally in funds managed by RLAM, but has the flexibility to invest in other vehicles and instruments, including directly held securities, in accordance with the fund managers’ views. It will make monthly income payments to investors.

Positioned as a credit fund, the fund invests, via the underlying funds, predominantly in high yield and investment grade corporate bonds. However, sitting within the IA Sterling Strategic Bond sector, it has a flexible remit to invest across the fixed income spectrum. The managers will adjust the fund’s allocations and exposures in line with their views on the underlying assets, taking into account a range of macroeconomic and credit market factors.

The fund adheres to our core investment philosophy which aims to take advantage of inefficiencies within credit markets. We believe these inefficiencies arise as a result of the market being constrained by the benchmark orientation of many investors, their over-reliance on credit ratings and focus on the most liquid issues. In addition, we believe that secured bonds are generally undervalued and that our focus on security, such as bonds with a claim on specific assets, creates potential for outperformance.

Product Risk Warning

Past performance is not a guide to future performance. 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.

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