Factsheet: Royal London Sterl Extra Yld Bd A

Sterling Bonds

Rated Fund 2013-2018. A high yield with an emphasis on security

This fund won Money Observer's Best Larger Sterling Bond Fund award in 2014 and was highly commended in 2016. It lives up to its name, with a yield of over 5 per cent. Income is paid quarterly.

The fund is highly diverse with almost 200 holdings. It is managed by Eric Holt, who has three decades of experience in bond markets. He offers a different perspective on bond-market investing because he focuses on more esoteric, undervalued and overlooked areas. These include bonds without a credit rating.

At the end of 2017, more than a third of the portfolio was in unrated bonds. Holt aims to provide investors with a high yield without taking the degree of risk normally associated with high-yield funds. For this reason, he favours bonds that are secured against specific assets, such as property or cash flows.

Holt looks to exploit bond market inefficiencies. He believes that by considering a wider investment universe than his peers, he can uncover value in many areas that are often overlooked, including unrated and asset-backed bonds and loans.

He does not rely on bonds' credit ratings; the main question for him is whether there is sufficient reward for the risk being taken.

Narrative and ratings content all as of 01 January 2018.

See all Money Observer rated funds
Name
Royal London Sterl Extra Yld Bd A
Manager
Royal London Asset Management Ltd
Type
Open Ended Investment Company
ISIN
IE0032571485
Sector
£ Strategic Bond
Launched
14/04/2003
OCF
0.83 %
Risk Rating
3
3 Year Sharpe
1.79
3 Year Alpha
6.61
Yield
5.6 %
Benchmark
FTSE Act UK Cnvt Gilts Over 15 Yr TR GBP
The fund’s objective is to achieve a high level of income and to achieve gross redemption yield of 1.25 times the gross redemption yield of the FTSE Actuaries British Government 15 year index. The above objective applies to Class A and Class B shares in each of the sub-funds. The sub-fund seeks to achieve its investment objective by investing at least 75% of its assets in Sterling denominated securities traded principally on the London Stock Exchange or over the counter markets. The sub-fund may also invest up to 25% of its assets in non-Sterling denominated securities traded principally on European, U.S., Canadian and Australian exchanges or over the counter markets.
Holding %
Ei Grp 6.375% 2.39 %
Amedeo Air Four Plus 2.12 %
Centrica 1.98 %
Premiertel 6.175% 1.91 %
Investec Bk 9.625% 1.85 %
Edf 1.83 %
Edf 1.82 %
Telereal Securitis FRN 1.61 %
Santander Uk Cv 10.0625% 1.58 %
Cybg Cv 1.57 %
Region %
United Kingdom 68.39 %
Europe - ex Euro 20.25 %
Canada 7.62 %
Sector %
Energy 56.71 %
Industrials 35.19 %
Financial Services 8.10 %
Name
Royal London Asset Management Ltd
Address
EC3V 0UF, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Eric Holt
Joined 04/14/2003

Eric joined Refuge Assurance’s investment team in 1979, having been initially recruited into the Actuarial department. He has overall responsibility for RLAM’s credit research process and has extensive knowledge of UK corporate bonds, which has been his main focus for twenty years. Eric is a graduate of Nottingham University with a degree in mathematics and is an associate of the Institute of Actuaries.

Data provided by Morningstar.

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