The fund aims to provide a combination of capital growth and income to deliver a return that is higher than that of the short-dated investment grade corporate bond market over any five-year period.
Investment policy and strategy
Core investment: At least 80% of the fund is invested, directly or via derivatives, in high quality bonds issued by companies from anywhere in the world. These securities can be denominated in any currency.
The fund typically invests in bonds which have short repayment dates and, as a result, it has a low portfolio duration. The fund aims to hedge any non-euro assets back to euro.
Other investments: The fund may invest in bonds issued by companies with a longer time to repayment and uses derivatives to reduce their sensitivity to interest rate movements. The fund may also invest in lower quality bonds, government bonds and cash or assets that can be turned into cash quickly.
Derivatives: The fund may invest via derivatives and use derivatives to reduce the risks and costs of managing the fund.
Strategy in brief: The bonds held in the fund are generally issues due to be repaid within a short period to minimise the effect of interest rate movements on the fund’s value. Asset allocation and bond selection are at the heart of the fund’s investment process. The investment manager has the flexibility to spread the portfolio across issuers, sectors and countries, supported by in-depth research by an in-house team of analysts.
Benchmark: Markit iBoxx EUR Corporates 1-3 year Index
The benchmark is a comparator against which the fund’s performance can be measured. The index has been chosen as the fund’s benchmark as it best reflects the scope of the fund’s investment policy. The benchmark is used solely to measure the fund’s performance and does not constrain the fund's portfolio construction.
The fund is actively managed.
The investment manager has complete freedom in choosing which investments to buy, hold and sell in the fund. The fund’s holdings may deviate significantly from the benchmark’s constituents.
For unhedged and currency hedged share classes, the benchmark is shown in the share class currency.
You can find more information about the objective and investment policy of the fund in the Prospectus.
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.
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.
The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in 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.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
The Fund allows for the extensive use of derivatives.
The performance webpage for this fund is currently being reconfigured.