Schroder Sterling Corporate Bond Fund Z Accumulation GBP
New for 2019. A fund that aims to tread carefully
Schroder Sterling Corporate Bond is a newcomer to our corporate bond selection for 2019, thanks to its consistently excellent performance and decent yield of 4.4%.
Jonathan Golan, who has run the fund since 2017, has worked at Schroders since 2013. He says his expertise lies in credit analysis, credit strategy, financial modelling and portfolio construction.
Golan invests at least 80% of the fund’s assets in bonds denominated in or hedged back into sterling. He can have up to 20% in bonds rated below investment-grade or unrated securities. At the end of 2018, the fund had 17% in this area, as well as almost 10% in sovereign and foreign government stock. The lion’s share of assets, almost 60%, is in BBB-rated stock, the bottom end of the investment-grade scale.
The largest sector weightings in both absolute and relative terms are industrials and financials, where it has respectively 44% and 32% of assets deployed. Eight financials firms make up its top 10 holdings, including Yorkshire Building Society, Credit Suisse and CYBG, a holding company that owns Clydesdale Bank, Yorkshire Bank, Virgin Money UK and the app-based bank B.
Golan believes global credit valuations and growth peaked in the first and second quarters of 2018 respectively. He says: “A period of decelerating growth and tightening monetary conditions means we ought to tread carefully by balancing the portfolio between attractive idiosyncratic investment opportunities and a challenging macro backdrop.”
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
|Euro BOBL Future Sept19||3.96 %|
|United Kingdom of Great Britain and Northern Ireland 1.5%||3.36 %|
|Euro BUND Future Sept19||3.29 %|
|Swap/06/15/2024/P:GBP/UKRPI/1M /R:GBP 3.65750_Receive||2.82 %|
|Short Gilt Future Sept19||2.74 %|
|Buy Protection on HSBC HOLDINGS plc SUBORDINATE/Pay: EUR 1.00000 Maturing o||2.70 %|
|NGG Finance plc 5.62%||2.34 %|
|US 10 Year Note (CBT) Sept19||2.34 %|
|Virgin Money Holdings (UK) plc 3.38%||2.26 %|
|London & Quadrant Housing Trust 2.62%||2.13 %|
Jonathan Golan is a Fund Manager at Schroders, which involves helping manage the European Credit Fixed Income strategy. He joined Schroders in 2013 and is based in London. Jonathan was Fixed Income Analyst at Schroders from 2013 to 2015, responsible for European Credit Fixed Income. Qualifications: MSc in Financial Economics from Oxford University; BA in Economics from The Hebrew University.
Data provided by Morningstar.
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