Investment Grade Short Dated Credit Fund

Fund Objective

The Fund’s investment objective is to achieve a total return over the medium term (3–5 years) by investing at least 80% in investment-grade bonds. Of these, at least 70% will  be short-dated  (bonds that will reach maturity within five years). Prior to investment, the Fund’s holdings are subject to predefined ethical criteria. The Fund’s performance target is to outperform, after the deduction of charges, the ICE Bank of America Merrill Lynch 1–5 Year Sterling Non-Gilt Index (the "Index") by 0.25% over rolling 3-year periods.  For further information on the Fund's index, please refer to the Prospectus, available via the fund information section of this website. The Fund is actively managed.

Fund managers

The lead Fund Manager is Richard Nelson, he is supported by Fund Manager, Paola Binns.

Richard Nelson joined RLAM from The Co-Operative Group when its life, pensions and asset management business was acquired by Royal London in 2013. Richard joined The Co-operative 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 gilts since 2000 and corporate bonds since 2005.  Richard qualified as an actuary in 2003 and holds a degree in Mathematics & Statistics from Exeter University. 

Paola Binns is a Fund Manager on the Fixed Interest Team and is responsible for the management of corporate bond portfolios. She brings over 30 years' experience in bond markets to RLAM, having joined in August 2007 from Credit Suisse Asset Management where she was responsible for managing sterling credit assets. Paola has developed a strong track record across a wide range of bond asset classes having held a number of roles specialising in European corporate bonds, government bonds and Emerging Market debt. Paola has an MA degree in History and Spanish Literature from Oxford University.

Investment approach

The Fund is managed using a combination of top-down analysis, based on our macroeconomic views, overlaid with bottom-up security selection.

At the macro level we analyse the major economic regions, focusing on key variables such as growth rates and inflation that may impact interest rates, and use the output of this analysis to help us position the Fund in terms of overall interest rate exposure and any other relevant exposures such as to specific countries.

At the micro level we analyse a range of factors: balance sheet strength, cashflows and the business environment in which the issuer operates. In addition, we look at the protective features of potential bond investments, focusing on covenants and where the bond stands in the hierarchy of capital instruments.

We use a third party to screen eligible investments. RLAM’s ethical framework combines the avoidance of companies involved in excluded activities with the identification of best of breed companies in permitted sectors.

Companies that generate over 10% of their turnover from either one or a combination of the following categories are excluded:

Armaments - manufacturing armaments or nuclear weapons, or associated strategic products

Tobacco - growing, processing or selling tobacco products

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. 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. This fund can invest more than 35% of its value in government securities.