The bond fund with the golden touch
Royal London Asset Management's (RLAM) high yield bond fund, the Sterling Extra Yield fund, struck gold at the recent 2012 Financial Times Pensions Investment and Provider Awards (PIPAs).
Did you know?
RLAM are big players in the UK bond market. Managing over £10 billion of assets in the corporate bond market (as at 31 May 2012) gives them an informative edge.
Now in its 13th year, the PIPAs seek to recognise excellence by providers of products and services to UK occupational pension schemes.
The criteria used to judge the awards include innovation, service standards, competitive edge and performance and the Sterling Extra Yield fund certainly ticks off these boxes.
As an integral part of the Scottish Life fund range, we're delighted with this news. The fund beat off a string of competition in the High Yield category at the 2012 PIPAs on 23 May.
What's special about the fund?
The fund is managed by Eric Holt, Head of Credit at RLAM, with a Citywire rating of 'A'. Add the wider input of RLAM's credit team and you're looking at a team with an average of 18 years' experience that adopts an investment approach setting them apart from competitors.
This depth of experience RLAM have in fixed interest markets, and insight into a company's finances, gives them all the tools they need to exploit opportunities in an area of value that isn't typically recognised within markets.
A key feature of the fund is its significant diversity. This enables RLAM to include higher yielding investment grade, sub-investment grade and unrated bonds.
Another key feature is RLAM's ability to identify those bonds which not only provide high yields but are also secured and structured.
So it's just another corporate bond fund then?
Well no, it isn't. High yield bond funds carry a higher degree of risk than corporate bond funds. However, taking onboard additional risk means investors could be rewarded with more attractive returns.
RLAM use their in-depth market knowledge to invest in a broad range of bonds across the spectrum of credit ratings as well as those which are not rated by rating agencies.
Whereas credit agencies are more interested in assessing a company's probability of default, RLAM are more interested in obtaining a higher yield for the risk they're willing to take. This means RLAM are ideally placed to exploit investment opportunities in areas of the market that others would simply overlook.
It's a bond fund with the golden touch.
Past performance is not a guide to the future. The value of your investment can go down as well as up and you may not get back the value of the original investment.
Published 5 July 2012
For professional advisers only