Royal London Corporate Bond
This fund offers access to a portfolio of predominantly, but not exclusively, investment grade corporate bonds. The managers have proved adept at delving into parts of the fixed income market where others fear to tread and identifying bonds that offer superior risk-adjusted returns. The process is risk-aware, concentrating on avoiding losers rather than picking big winners, with the goal of providing an attractive and stable income over time.
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Fund Managers
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Shalin Shah joined Royal London Asset Management’s Fixed Income team in 2008 and is a Senior Fund Manager managing corporate bond portfolios such as the RL Corporate Bond Fund and Sustainable Managed Income. He played a key role in developing RLAM’s Buy & Maintain proposition and manages various buy & maintain and active portfolios. Shalin won the Fund Manager of the Year award in 2021. Before RLAM, he advised on investment solutions at PricewaterhouseCoopers LLP. He holds a BSc in MORSE from the University of Warwick and is a qualified actuary.
Matt Franklin is a Fund Manager at Royal London Asset Management, overseeing several sterling corporate bond portfolios, including the Sustainable Managed Income and Corporate Bond funds. He joined RLAM in 2014 as a credit analyst, gaining expertise in unsecured corporate bonds and asset-backed securities, and contributing to the team’s ESG integration strategy. Matt holds a degree in Economics from Durham University, is a CFA Charterholder, and is a Certified Financial Risk Manager (FRM).
Shalin Shah joined Royal London Asset Management’s Fixed Income team in 2008 and is a Senior Fund Manager managing corporate bond portfolios such as the RL Corporate Bond Fund and Sustainable Managed Income. He played a key role in developing RLAM’s Buy & Maintain proposition and manages various buy & maintain and active portfolios. Shalin won the Fund Manager of the Year award in 2021. Before RLAM, he advised on investment solutions at PricewaterhouseCoopers LLP. He holds a BSc in MORSE from the University of Warwick and is a qualified actuary.
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Company Description
Royal London Asset Management, established in 1988, is a wholly owned and central part of the Royal London Group. It manages 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.
Fund Performance
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Investment process
The team pays particular attention to the asset-backed sector and unrated bonds. In addition to credit quality analysis carried out by most bond fund managers, the managers go into painstaking detail, analysing covenant documents to estimate not only the chance of default, but also the expected recovery rate. Royal London Corporate Bond fund is well diversified and typically holds more than 200 names.
Risk
While the managers look at some of the less researched areas of the market, their 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.
ESG
ESG - Integrated
Royal London considers ESG issues as integral to its investment process. It believes that unmanaged ESG risk can lead to unfavourable financial outcomes, so each of the Environment, Social and Governance elements are considered when performing stock analysis. Corporate governance is of particular importance and the team will fully engage with company management and regularly attend company AGMs. Royal London follows an ESG integration framework which includes high-quality and targeted credit analysis, targeted interaction with bond issuers and building portfolios with appropriate diversification and with strong covenant protection. Collaborative working relationships between Royal London’s Responsible Investment team and the fixed interest investment teams are key. Both teams are encouraged to meet weekly and to present and share their insights and findings with each other.
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