HL Global Corporate Bond investment strategy
Important information - This is designed for investors who want to make their own investment decisions without personal advice. If you’re not sure if an investment’s right for your circumstances, please ask us for advice. Investments will fall as well as rise in value so you could get back less than you invest. Any income is variable and not guaranteed.
Investing in funds isn't right for everyone. You should only invest if the fund's objectives are aligned with your own, and there's a specific need for the type of investment being made. You should understand the specific risks of the fund before you invest, and make sure any new investment forms part of a diversified portfolio. We recommend holding this fund for at least 5 years.
The HL Global Corporate Bond Fund brings together exceptional, contrasting and complementary approaches into one investment run by HL Experts.
Most bond fund managers add value by investing in a good spread of different bonds, where each can contribute a little to performance. They also aim to avoid companies who will struggle or fail to repay their debts.
There are multiple approaches that can be taken, which is why we’ve chosen five different managers to select bonds for our fund and blended them into a well-diversified investment that could serve as a one-stop-shop for global corporate bonds.
HL’s experts have chosen experienced, pragmatic fund managers who operate within large, well-resourced organisations to cover the wide spectrum of global bond opportunities available. They’ll conduct in-depth analysis, and look in detail at the specifics of individual companies and their bonds.
They’ve all got some flexibility to invest in higher-quality government bonds to offer some shelter if they think times are getting tough, and aim to boost long-term performance by investing up to 20% of the fund in higher-yielding parts of the bond market, although this is a higher-risk approach.
The fund can add and remove managers as required.
How the HL Global Corporate Bond Fund works
This fund invests in bonds from high quality companies around the world.
HL’s experts have hand-picked a team of some of the best fund managers from great fund management groups. They believe these offer great potential for long-term performance. The fund managers manage their own portions of the fund using their tried and tested strategies overseen by HL’s expert fund managers.
You might want to reduce risk by adding bonds to your existing portfolio, or use this fund with other investments to take an income.
You can invest from a lump sum of as little as £100, or £25 by monthly Direct Debit.
The fund’s aim
HL’s managers aim to grow your investment over the long term (at least 5 years) and outperform the ICE BoFA Global Corporate Index total return after any charges. This index measures the overall performance of Global Corporate bonds including any income they produce.
The fund pays out any income it receives monthly after charges, though income is variable and not guaranteed.
Investments will fall as well as rise in value, so you could get back less than you invest.
Here’s how the fund is constructed:
HL Global Corporate Bond underlying portfolios
RBC BlueBay Asset Management
Managed by Andrzej Skiba and a well-resourced team of co-managers and analysts. They believe bond markets are inefficient and that they can exploit this through in-depth research. Their main focus is finding bonds issued by good quality companies which are improving, or where other investors underappreciate their prospects. They also consider the economic outlook and will be more adventurous when they think it’s improving. They’re willing to back their views with high conviction, so they take a higher-risk approach.
Lyndon Man and his team have managed a global corporate bond fund for over 10 years. They identify themes they think will drive the global economy and combine this with their research on economies, sectors, and companies to choose their favourite bonds. They make sure they have a good spread of investments overall, to avoid taking unnecessary risks. Their focus on themes brings something a little different to the mix, and over the years it has helped the team perform well.
Ben Lord at M&G starts with an assessment of the global economy and uses this to help choose where to invest. He looks for bonds whose prospects aren’t fully appreciated by other investors, buying when they look undervalued, selling when others see things from his perspective, and then looking for the next opportunity. He’s happy to be relatively more defensive or aggressive depending on his outlook. He’s supported by a hugely experienced team which we’ve held in high regard for many years.
Morgan Stanley aims to take advantage of market volatility – when investors are scared and prices are falling, they look for bargains, when investors are greedy and prices are rising they’re happy to sell. Beyond this they aim to run a relatively ‘core’ portfolio that doesn’t take big risks. Ric Ford and his team also use their economic views and rigorous company research to decide which bonds to back.
PIMCO is one of the best-known and best-resourced bond fund managers in the world. This enables them to look far and wide for opportunities. They start with their long-term economic outlook, which helps decide how aggressive or conservative they want to be. From here they do in-depth research on individual bonds to identify the best opportunities to fit their economic view. They’re happy to back their views with conviction and run a higher risk portfolio at times.
Yearly charge based on an example £1,000 investment:
HL platform fee
HL platform fee
The ongoing charge is taken directly from the fund and will be taken from the income it produces rather than the capital. This covers the management of the fund and all expenses other than transactional fees which are charged on top of this, these costs are incurred by all funds when shares are bought or sold and are also reflected in the fund’s price. The HL platform fee is our charge for looking after your investments which won't be over 0.45% per year. Both of these charges will be payable if you want to hold the fund with HL. The above example assumes no growth.
This fund is managed by Hargreaves Lansdown Fund Managers Ltd, part of the Hargreaves Lansdown Group. If you invest, HL will receive the fund's management charge, as well as the platform fee.