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LF Canlife Corporate Bond Fund

About the Fund

The Fund aims to provide an income and the potential for capital growth, over any five-year period, after all costs and charges have been taken. The Fund’s comparator benchmark is the Markit iBoxx GBP Corporate Bond Index.


 

 

Essential features of the Fund

LF Canlife Corporate Bond Fund:

  • A conservative, low-risk style, focusing on capital preservation and sustainable income and the fund manager’s strong belief that the avoidance of bad credits (i.e. defaults) is critical to success
  • Invests at least 80% of its assets worldwide in sterling-denominated investment grade corporate bonds across different industry sectors, without limitation
  • Can invest up to 20% of its assets in other debt securities (such as government and public securities, non-investment grade corporate bonds and non-sterling denominated bonds), money market instruments, deposits and cash
  • Investment in collective investment schemes is limited to 10% of the Fund’s assets by value
  • The Fund may use derivatives for efficient portfolio management purposes
  • Up to 25% of the Fund’s holdings by value may be used to generate additional income from stock lending

For further details on the objective and investment policy, visit the Literature section to view fund KIIDS and Prospectus.

How the Fund is managed:

    • The Fund Managers consider global trends in macro factors, such as interest rates and inflation, and analyse the domestic influences on UK bond markets
  • A detailed quarterly macro review is undertaken making forecasts for interest rates and bond yields in the UK
  • A weekly review involving the entire fixed income team is undertaken to assess positioning and market developments, including commodity prices, inflation expectations, currencies, equity markets, sovereign CDSs, liquidity, bond yields, economic data releases, new issues coming to the government and corporate bond markets
  • The Fund is then constructed via a bottom-up approach, with the managers ensuring that the Fund’s sector exposure is sufficiently diversified, as well as reflective of the teams’ macro views. Looking at each sector, they seek the best-value companies and review valuations on three levels: price relative to peer issues, price relative to past performance, price relative to outlook and ratings
  • Credit ratings are internal and assigned by Canada Life Asset Management. Ratings will generally be in line with the major external rating agencies and should not be higher than the highest rating of these. Canada Life Asset Management will assign ratings to bonds that do not have an external rating

Reasons to recommend

Provides income

We seek to invest in corporate bonds that look attractive from a risk/return perspective and which are capable of delivering attractive yields to investors. As a result, the Fund looks to provide investors with an income, through investment in companies that we believe offer the best long-term value.

A focus on fundamentals

Particular attention is devoted to corporate dynamics and strategy, balance sheet strength, liquidity, leverage and management quality. Our team favours issuers displaying a number of different characteristics – including solid profitable businesses with long track records, limited ratings downsides, positive cash flows, low debt levels, clear disclosures and bonds offering structural seniority.

Active management

The Fund is actively managed, well diversified and aims to offer a lower volatility and drawdown profile relative to the benchmark.  The Fund may not be appropriate for investors who plan to withdraw their money within five years.

Credit analysis

We have a significant credit research team and a long heritage in fixed income investing, with a focus on strong credits, diversification and capital protection.

The value of investments may fall as well as rise and investors may not get back the amount invested.

 

 

 

Fund Managers
Count

Michael Count

Senior Fund Manager, Fixed Income

Learn more
Kj Sinha

Kshitij 'KJ' Sinha

Fund Manager, Fixed Income

Learn more
Sales contact
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Adam Creed

Sales Director – Discretionary and Group

020 7415 6488

adam.creed@canadalife.co.uk

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