Schroder Sterling Corporate Bond Fund Z Accumulation GBP
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
|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 %|
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.
The Content is only for your general information and use and is not intended to address your particular requirements. The Content does not constitute any form of advice, recommendation or arrangement by Money Observer and is not intended to be relied upon by you in making (or refraining from making) any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision.
This information is sourced from our partner Morningstar. We believe the data to be correct however you should take care in using any information.
You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.