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Royal London Corporate Bond Trust Inclusive - Class A - Income (GBP)

Sell:101.30p Buy:101.30p Change: 0.20p (0.20%)
Prices as at 30 September 2020
Sell:101.30p
Buy:101.30p
Change: 0.20p (0.20%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 30 September 2020
Sell:101.30p
Buy:101.30p
Change: 0.20p (0.20%)
Prices as at 30 September 2020
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund is on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. However, this is not a recommendation to buy.

We rate Jonathan Platt, Shalin Shah, and the bond team at Royal London highly. They're prepared to invest in parts of the bond market a lot of other investors ignore. Looking in under-researched areas throws up opportunities to boost returns, but it can add risk, so we view this as a more adventurous corporate bond fund. It could offer a slightly higher yield and greater long-term performance potential, but there are no guarantees. It's also available through HL with low ongoing charges.

We think it's one of the best funds available if you're looking to invest in corporate bonds and are prepared to take a little more volatility for what we see as excellent long-term potential.

Our view on the sector

Funds in this sector invest mainly in 'investment grade bonds'. These are issued by companies that are more likely to be able to repay their debts to bondholders. As such, they tend to offer lower yields than bonds issued by companies that are less likely to be able to pay off their debts. Corporate bonds have generally performed well since the 2008 financial crisis. With interest rates on cash so low, they've appealed to income investors. This has pushed up bond prices, but means their yields have also fallen. Some suggest there is now less value in this area of the market. We think that with interest rates likely to stay lower for longer, a corporate bond fund could be a good addition to a diversified portfolio invested to generate income.

Performance Analysis

The fund has tended to do better than others when the market's rising, but decline faster when it's falling. It struggled during the financial crisis, for example, but has generally performed well since.

Investors who've been prepared to ride out the dips have been rewarded with excellent long-term performance. It's possible past performance won't be repeated though.

Investment Philosophy

The managers search for bonds that other investors have misunderstood. Often they'll be perceived as too risky. But with some extra analysis the Royal London team can often be confident there are sufficient rewards on offer for the risks being taken. They typically take a long-term view, with the aim to exploit inefficiencies and find undervalued opportunities. They're prepared to look far and wide to find these opportunities.

Process and Portfolio Construction

We think the team's edge comes from carrying out detailed research into 'low profile' parts of the market. These under-researched bonds may be unrated (the issuing company has not sought a formal assessment of credit quality from a credit ratings agency), complex and often secured against a company's assets. This provides the opportunity to add value on a case-by-case basis, although these bonds are higher risk. The fund typically holds unrated and secured bonds and has a focus on A and BBB-rated bonds, which sit at the lower end of the investment grade corporate bond spectrum, although the fund also invests in higher-risk high-yield bonds. The fund aims to be well diversified.

question mark Manager Track Record Based on HL Quantitative Research

  • Royal London Corporate Bond A Inc
  • IA £ Corporate Bond
FROM: TO:


Fund Track Record

29/09/15 to 29/09/16 29/09/16 to 29/09/17 29/09/17 to 29/09/18 29/09/18 to 29/09/19 29/09/19 to 29/09/20
Annual return 11.82% 1.84% 0.59% 9.18% 2.85%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

Royal London Asset Management (RLAM) is part of the Royal London Group and was established in 1988. The acquisitions of Scottish Life In 2001, and Scottish Provident and Phoenix Life Assurance in 2008 boosted the assets under management at the group, and it now looks after a diverse range of assets including fixed income, equities, cash and property. RLAM offers a wide choice of funds for investors. The company's forte is in the provision of income portfolios and its philosophy is that all well-diversified portfolios should include an element of income.

Information about the fund

Fund manager biography

manager photo
Manager Name: Jonathan Platt
Manager start date: 1 March 1999
Manager located in: London

Jonathan heads up the Fixed Interest Team. He joined the Royal London Group in 1985 and became Head of Fixed Interest in 1992. Jonathan has an MA degree in Philosophy, Politics and Economics from Oxford University.

manager photo
Manager Name: Shalin Shah
Manager start date: 1 October 2017
Manager located in: London

Shalin Shah joined the Fixed Income team in 2008. Prior to becoming a credit Fund Manager Shalin was involved in a variety of areas including LDI (Liability Driven Investment) product development and risk management. Before joining RLAM, Shalin worked at PricewaterhouseCoopers LLP where he was involved in advising clients on a variety of investment solutions, including LDI and strategic asset allocation. Shalin holds a BSc in MORSE (Mathematics, Operational Research, Statistics and Economics) from the University of Warwick and is a qualified actuary.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account