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Royal London Corporate Bond

Elite Rated by FundCalibre

This fund offers access to a portfolio of predominantly, but not exclusively, investment grade corporate bonds. The manager has proved adept at delving into parts of the fixed income market where others fear to tread and identifying issues that offer superior risk-adjusted returns. The process is risk aware and concentrates on avoiding losers rather than picking big winners with the goal of providing an attractive and stable yield over time.

Company Description

Royal London Asset Management, established in 1988, is a wholly owned and central part of the Royal London Group and one of the UK’s leading fund companies, managing investments, pension funds and other assets on behalf of clients. Delivering sustainable sources of income is a particular focus, and managers scrutinise a wider universe than many of their competitors to find opportunities in areas that are often overlooked.

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Fund Manager

Jonathan has been applying his long-term, macroeconomic approach since joining Royal London Group in 1985. In 1992, he became head of fixed interest. He is known for swimming against the tide and investing in high yield bonds that lack a credit rating.

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I work closely with other managers and analysts to share research and investment ideas, allowing us the resources to explore often overlooked opportunities.

Jonathan Platt - Fund Manager

The Investment Process

Jonathan believes that over-reliance on ratings agencies and inadequate benchmark construction methods leads to inefficiencies that a stock-picking manager can exploit. He pays particular attention to the asset-backed sector and unrated bonds. In addition to credit quality analysis carried out by most bond fund managers, Jonathan goes into painstaking detail, analysing covenant documents to estimate not only chance of default, but the expected recovery rate too. The portfolio is well diversified and typically holds more than 200 names.

Risk

While Jonathan looks at some of the less researched areas of the market, his detailed analysis, as well as the large number of names in the portfolio, goes a long way to reducing single company credit and liquidity risk. The fund in fact has a lower risk profile than many of its sector peers.

Our Opinion

What sets this fund apart from many of its peers is the manager’s ability to identify less well-known stocks with superior risk-adjusted returns. The fund has an attractive yield, and the strength and stability of the team give us confidence.

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