| Asset Group | Asset Sub-Group | Investment Category |
| Fixed Income | Global bonds | Adventurous |
The fund has been managed by Rachid Semaoune since inception in December 2015 with support from co-pm Eric Holt. Semaoune also manages the Royal London Sterling Extra Yield and Global Sustainable Credit funds. The two managers are supported by the credit team and by the broader RLAM fixed income and credit research capabilities. Analysts provide fundamental credit evaluation and idea generation, whilst the managers do more work on relative value analysis. The fund is extremely flexible, due to its unconstrained nature and is benchmark agnostic across all currencies with no implicit, or explicit, duration targets. The fund exposure to GBP-denominated securities will typically not exceed 40%, with the remaining 60% invested in Euro and USD denominated securities, which are hedged back to sterling. The strategy has total return philosophy, targeting a yield of 5% to 6% before fees. The fund’s combined exposure to high yield and unrated bonds is expected to be around 80% with the remaining investment grade exposure towards subordinated financials and corporate hybrids. The fund is diversified with around 200 holdings to minimize idiosyncratic risk. As can be expected from Royal London fixed income strategies, the team focus on under-researched parts of the market, including unrated bonds. Analysts focus on credit enhancements – security, structure, covenants. The fund has achieved an annualized return of 4.1% since inception, versus 2.9% and 1.9% from the Bloomberg Global High Yield GBP Hedged Index and IA Strategic Bond sector respectively. 2022 was the fund’s first negative calendar year, but it managed to comfortably outperform both comparators. Opinion January 2023 | ||
Risk warnings
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