Most bond fund managers invest in a spread of different bonds, where each can contribute to performance. They tend to avoid companies they think will struggle or fail to repay their debts.

There are lots of approaches they can take. This is why HL’s experts have chosen five underlying managers to select the bonds and blended them into a well-diversified fund aiming to be a one-stop-shop for global corporate bonds.

HL’s experts have chosen experienced, pragmatic fund managers working in large, well-resourced organisations that cover the wide spectrum of global bond opportunities. These managers will conduct in-depth analysis and look in detail at the specifics of individual companies and their bonds.

The fund has some flexibility to invest in higher-quality government bonds to offer some shelter in case times get tough. To boost long-term performance, up to 20% of the fund can be invested in higher-yielding parts of the bond market, although this is a higher-risk approach.

In this article, we shine a spotlight on all the managers and what they bring to the fund.

The HL Global Corporate Bond fund is for investors who want to make their own investment decisions and understand how to build a diversified portfolio.

If you’re not sure of the suitability of an investment for your circumstances, please contact us for advice. Investments and the income they produce will fall as well as rise in value, so you could get back less than you invest.

Meet the Global Corporate Bond fund managers

HL fund managers Richard Troue and David Smith will be looking after the Global Corporate Bond fund.

We spoke to Richard and David about the new fund, including:

How this fund is different
Why investors should consider bonds
Who the fund could be for

HL Fund Managers Richard Troue and David Smith discuss the HL Global Corporate Bond Fund and what the future holds for bonds.

Title Screen – New Global Corporate Bond Fund launch

Title Screen - Why bonds?

Richard Troue, Fund Manager at Hargreaves Lansdown, speaks to camera.

“Why bonds? The bond market is absolutely huge. It’s in excess of 100 trillion dollars in size. It’s far bigger than equity markets, there’s more money invested in bonds and there are more bonds in issue than there are shares. And investors would tend to hold bonds for three main reasons:

One - To deliver some income.

Two - To provide some diversification. They tend to experience less severe fluctuations in value than shares, so they do bring an element of diversification and balance to a portfolio.

And finally they can often offer some shelter in turbulent times when equity markets fall quite heavily, typically we expect bond markets and global corporate bond markets to fall a bit less.

Title Screen – What will you hold, how will you invest?

The majority of this fund will be invested in global corporate bonds. That is bonds issued by companies worldwide. And a big proportion of the fund will be invested in international businesses or bonds issued by international businesses. Think of the likes of Microsoft or Vodafone or JP Morgan.

Title Screen – Why Now?

I think the most compelling, or one of the most compelling reasons to invest in bonds now, and in global corporate bonds in particular, is for the yield they offer.”

David Smith, Fund Manager at Hargreaves Lansdown, speaks to camera.

“To probably a year ago, corporate bonds offered quite a low yield. The market has corrected quite significantly over the past year and now you can get an income of 5% or more.”

Richard Troue speaks to camera.

“So it wasn’t that long ago that bonds were yielding less than equities, and we’re now seeing global corporate bonds offer a bit more yield than equities.“

Title Screen – How is this fund different?

David Smith speaks to camera.

“So this fund will invest in a portfolio of funds managed by 5 different managers. So you can go out and buy one investment-grade corporate bond fund for example, but if you do that you’re placing all of your risk with that manager being right or wrong. Whereas this portfolio will spread your money across 5 managers. Each of them has a different approach and is trying to achieve the same goal but through different strategies. So therefore you’re not placing all of your bets on one thing working out, so you have a very well diversified portfolio.”

Richard Troue speaks to camera.

“We appreciate there’s no one right or wrong way to outperform and deliver good returns when it comes to corporate bond investing. Whereas sometimes in equity markets it’s about finding the next big winner or a company with very strong growth potential, the bond market is a little bit more about stability, finding companies that can service their debts and repay bond holders. And by blending together some different managers, each taking a slightly different approach, we hope to offer a very diversified portfolio that offers good, long-term potential but without the ups and downs associated with just investing with a single manager or just picking a few bonds yourself.”

Title Screen – Who is the fund for?

Richard Troue speaks to camera.

“I think an investment in global corporate bonds can be considered by almost all investors. They’re particularly relevant for those who want to build a diversified portfolio; so for anyone who doesn’t want their portfolio to be 100% invested in shares, bonds and global corporate bonds can offer some diversification. They perform a little bit differently to shares, so they can smooth out the return profile of your portfolio over time, and depending on how much risk you want to take, you can consider having more or less exposure to global corporates. I think another reason investors might consider them at the moment is for the income they’re offering. So as well as adding some balance and diversification to a portfolio, they can boost the income that a portfolio’s generating as well.”

Closing text:

This video is not personal advice or a recommendation to invest. If you are unsure about the suitability of an investment for your circumstances, please seek advice. Investments can fall as well as rise in value so you could get back less than you invest. Past performance is not a guide to the future.

Income is variable and not guaranteed.

Correct as at June 2023.

Who are the underlying fund managers?

Each external investment team plays its part focusing on their strengths and their specific roles. They’ll look to capitalise on tried and tested techniques to invest in what they believe to be the best bond investments.

Here are the managers that the Global Corporate Bond fund will be using at launch. The fund can add and remove managers as needed.

RBC BlueBay Asset Management

A well-resourced team of co-managers and analysts led by Andrzej Skiba. They believe bond markets are inefficient and try to exploit this through in-depth research.

Their main aim 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.

Invesco

Lyndon Man and his team are highly experienced global corporate bond fund managers. They look for 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 to avoid taking unnecessary risks. Their focus on themes will bring something a little different to the mix.

M&G

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.

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

Morgan Stanley aims to take advantage of market ups and downs. 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 not to take big risks. Ric Ford and his team also use their economic views and rigorous company research to decide which bonds to back.

PIMCO

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 to be. From here they do in-depth research on individual bonds to find the best opportunities to fit their economic view.

They’re happy to back their views with conviction and take a higher risk approach at times.

Invest now for the £1 per unit fixed launch price

Learn more about the HL Global Corporate Bond Fund including charges, and invest by 11:59pm on 19 July to secure the £1 fixed launch price.

Find out more

Key investor information

Investing in this fund isn’t right for everyone. You should only invest if the fund’s objectives align 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.

The HL Global Corporate Bond Fund is managed by our sister company Hargreaves Lansdown Fund Managers Ltd.

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