The characteristics of sterling credit markets and rating agency methodologies have seen radical changes over the years.
Royal London Asset Management (RLAM) has responded to these developments, while being consistent in the application of our investment philosophy – seeking to optimise the balance between risk and return, and offer investors an attractive income and total return in a period of ultra-low interest rates.
The decline of AAA, the growth of BBB
To demonstrate the changes in the wider sterling credit landscape, we consider one of our sterling funds, the RL Ethical Bond Fund, over the last decade. The table below compares the credit rating profile of the fund with the sterling credit market. As can be seen, there have been fundamental changes at both the portfolio and the index level over the last 10 years.