Objective
The fund aims to provide a combination of capital growth and income to deliver a return that is higher than that of the European investment grade corporate bond market over any five-year period.
Investment policy and strategy
Core investment: At least 70% of the fund is invested in bonds issued by companies denominated in any European currency. Issuers of these securities may be located in any country.
Other investment: The fund also invests in government bonds, high yield bonds and cash or assets that can be turned quickly into cash.
Use of derivatives: The fund typically invests directly, but may also invest indirectly via derivatives. Derivatives may also be used to manage risks and reduce costs, as well as to offset the impact of currency exposures arising from the fund’s non-euro investments.
For more information on the types of bonds held and derivatives used, please refer to the Prospectus.
Strategy in brief: The investment manager selects investments based on an assessment of macroeconomic, asset, sector and stock-level factors.
Spreading investments across issuers, industries and countries is an essential element of the fund’s strategy and the investment manager is assisted in the selection of individual bonds by an in-house team of analysts.
Performance comparator: The fund is actively managed. The BofA Merrill Lynch Euro Corporate Index is a point of reference against which the performance of the fund may be measured.
Glossary terms
Bonds: Loans to governments and companies that pay interest.
Derivatives: Financial contracts whose value is derived from other assets.
High yield bonds: Bonds issued by companies considered to be riskier and therefore generally paying a higher level of interest.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund.
High yield bonds usually carry greater risk that the bond issuers may not be able to pay interest or return the capital.
The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset's value vary in an unexpected way, the fund may lose as much as or more than the amount invested.
The fund is exposed to different currencies. Derivatives are used to minimise, but may not always eliminate, the impact of movements in currency exchange rates.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Operational risks arising from errors in transactions, valuation, accounting, and financial reporting, among other things, may also affect the value of your investments.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
Other information
The Fund allows for the extensive use of derivatives
The performance webpage for this fund is currently being reconfigured. In the interim, for performance information, please refer to the latest Fund Factsheet which can be found in the Literature section.