Eric Holt, a bond veteran, and Rachid Semaoune have run this flexible bond fund since it launched in late 2015. Holt has extensive knowledge of investment grade and high yield corporate bonds, gained over a career spanning 40 years. He has overall responsibility for Royal London Asset Management’s credit research process. Semaoune joined Royal London’s fixed income team in 2015 and has almost 20 years’ experience in credit markets.

With this fund, the pair run a well-diversified portfolio of around 200 holdings, predominantly focused on international credit markets. US and European debt account for more than 70% of the portfolio. UK debt accounts for around 20%. In terms of credit quality, the fund prefers high-yield and unrated bonds.

The managers believe that corporate bonds remain attractive over the medium term, while the level of income generation is also appealing given the prospect of short-term interest rates staying lower for longer.

October 2020