You are using an outdated browser. Please upgrade your browser to improve your experience.

A new blend

Combining sustainable investing with a global credit capability

Discover the Royal London Global Sustainable Credit Fund.

Our new fund brings together long, successful track records of fixed income and sustainable investing. It harnesses both our unique credit philosophy and a rich heritage in sustainable investing over a diverse number of key investment areas, to deliver positive investment choices without compromising on potential risk-adjusted returns. 

In a fast growing area of the market, RLAM has the experience and expertise to apply a well-defined investment process to assess the sustainability criteria of global credit issuers.

Key points

  • Global diversified credit portfolio – takes advantage of inefficiencies in ESG and wider credit analysis.
  • A highly diversified investment universe – by geography, currency, sector and issuer. Our sustainable analysis and screening reduces the eligible universe by over 50%. 
  • Brings together a long successful track record of investing sustainably – with a global credit capability.
  • Collaboration – across our experienced investment teams.
  • Independent External Advisory Committee – complements RLAM’s sustainable expertise.
  • Established and proven process – our sustainable process has evolved over 15 years making RLAM one of the longest established sustainable asset managers.

Launched at a time of growing investor interest in global credit markets, the fund will be an addition to the highly successful, award winning range of sustainable funds. We manage over £8 billion of assets across equity, fixed income and multi-asset funds within our sustainable range (as at 31 December 2020). 

Why RLAM for global credit?

  • We have invested significantly in our global credit team since its inception in 2012. Today the team is well resourced with 20 credit analysts and fund managers. 
  • Low carbon portfolio – actively avoiding carbon intensive industries while investing in companies at the forefront of the low carbon transition.
  • Fund Manager Rachid Semaoune is highly experienced, successfully managing another global sustainable credit strategy.

Investment focus

The fund’s investment objective is to outperform the Bloomberg Barclays Global Aggregate Corporate Total Return Index Hedged USD (the “Benchmark”) by 0.75% per annum over rolling three year periods (gross of fees).

The fund is suitable for both retail and institutional investors who are seeking a total return over the medium term. This typically means a minimum time horizon of three to five years but this could vary depending upon individual risk profiles.

The fund will invest in bonds from companies that are deemed to make a positive contribution to society. Investments will adhere to RLAM’s sustainable investment policy.

Fund facts

Launch date 10 February 2021
Sector IA Global Corporate Bond
Base currency USD
Minimum investment

Class M (GBP Hedged) £100,000

Class Z (GBP Hedged) £3,000,000

Fund management fee

 

Class M (GBP Hedged) 0.53%

Class Z (GBP Hedged) 0.40%

Source: RLAM as at 19 April 2021

 

An expert team

The fund is managed by Rachid Semaoune, a member of RLAM’s fixed income team. The management team has a collegiate approach, drawing in experience from the Responsible Investing, Global and Sterling credit teams. This team also works closely with Mike Fox, Head of Sustainable Investments, and Shalin Shah, the lead manager of our sustainable sterling credit strategies.

Image shows the structure of the RLAM sustainable and responsible investment teams

Investment Risks

The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested.

Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.

Credit risk: Should the issuer of a fixed income security become unable to make income or capital payments, or their rating is downgraded, the value of that investment will fall. Fixed income securities that have a lower credit rating can pay a higher level of income and have an increased risk of default.

Derivative Risk: Derivatives are highly sensitive to changes in the value of the underlying asset which can increase both Fund losses and gains. The impact to the Fund can be greater where they are used in an extensive or complex manner, where the Fund could lose significantly more than the amount invested in derivatives.

Efficient Portfolio Management (EPM) Techniques: The Fund may engage in EPM techniques including holdings of derivative instruments. Whilst intended to reduce risk, the use of these instruments may expose the Fund to increased price volatility.

Exchange Rate Risk: Changes in currency exchange rates may affect the value of this investment.

Interest Rate Risk: Fixed interest securities are particularly affected by trends in interest rates and inflation. If interest rates go up, the value of capital may fall, and vice versa. Inflation will also decrease the real value of capital.

Leveraged Risk: The Fund employs leverage with the aim of increasing the Fund’s returns or yield, however it also increases costs and its risk to capital. In adverse market conditions the Fund’s losses can be magnified significantly.

Liquidity Risk: In difficult market conditions the value of certain fund investments may be difficult to value and harder to sell, or sell at a fair price, resulting in unpredictable falls in the value of your holding.