Schroder Sterling Corporate Bond Fund Z Accumulation GBP

Sterling Bonds

Rated Fund 2019-20. A fund that treads carefully and pays quarterly    

Introduced in 2019 as a pure corporate bond choice, this fund has done well since. It has outperformed both the ICE Bank of America Merrill Lynch Sterling Corporate & Collateralised index and its peer group. Jonathan Golan has run the fund since 2017, investing at least 80% of the fund's assets in bonds denominated in or hedged back to sterling. His expertise lies in credit analysis, credit strategy, financial modelling and portfolio construction.

As the cycle matures and monetary policy is close to its limits, he maintains a relatively cautious exposure to market risk. On the other hand, he points to dispersion in credit markets being relatively high, implying that many bonds trade at materially higher yields than the index. He focuses on identifying high-yielding bonds where the market greatly overestimates the credit risk. The upshot is that despite elevated market valuations, he can still construct a high-quality portfolio of credit improvement stories at a near-4% yield, paid quarterly.

Some 60% of the fund is in BBB-rated stock, the bottom end of the investment-grade scale, an 18% overweight relative to the index. He can have up to 20% in bonds rated below investment grade or in unrated securities. At the end of 2019, the fund had 17% in this area. The largest sector weightings, in both absolute and relative terms, are to industrials (47%) and financials (34%).

Narrative and ratings content all as of January 2020.

See all Money Observer rated funds
Name
Schroder Sterling Corporate Bond Fund Z Accumulation GBP
Manager
Schroder Unit Trusts Limited
Type
Open Ended Investment Company
ISIN
GB0009379370
Sector
£ Corporate Bond
Launched
11/08/1995
OCF
0.63 %
Risk Rating
5
3 Year Sharpe
0.77
3 Year Alpha
1.04
Yield
3.7 %
Benchmark
ICE BofA Sterling Corp&Coll TR EUR
The Fund aims to provide income and capital growth in excess of the Bank of America Merrill Lynch Sterling Corporate & Collateralised (Gross Total Return) index (after fees have been deducted) over a three to five year period by investing in fixed and floating rate securities issued by UK companies and companies worldwide.
Holding %
Long Gilt Future June 20 22.89 %
Euro Bund Future June 20 9.94 %
Ultra US Treasury Bond Future June 20 1.85 %
Blackstone Property Partners Europe Holdings S.a r.l 1.75% 1.84 %
Euro Buxl Future June 20 1.80 %
Intermediate Capital Group PLC 1.62% 1.78 %
Logicor Financing SARL 2.75% 1.74 %
10 Year Treasury Note Future June 20 1.66 %
Grainger Plc 3.38% 1.58 %
Barclays PLC 3% 1.57 %
Name
Schroder Unit Trusts Limited
Address
EC2Y 5AU, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Jonathan Golan
Joined 02/28/2017

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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