Royal London Asset Management (RLAM) announces the launch of its Sustainable Short Duration Corporate Bond Fund – the latest addition to RLAM’s Sustainable Investment fund range.
Employing a high-conviction, actively managed approach underpinned by proprietary, bottom-up research, the new Fund will provide investors with access to a diverse set of sustainably minded borrowers across a variety of economic sectors.
Combining RLAM’s established heritage in sustainable investing and its market-leading sterling credit franchise, the Fund assesses the Environmental, Social and Governance (ESG) profile of bonds whose expected duration is 2.5 to 3 years. While the sustainability of a potential bond is rigorously assessed, returns are further underpinned by prioritising issuers offering additional bondholder protections wherever possible, reducing potential exposure to downside risk. Investors also benefit from the Fund’s exposure to shorter duration assets, thereby limiting the portfolio’s sensitivity to interest rate changes.
Alongside attractive yield, the Fund will offer investors access to a variety of socially impactful sectors that are often out of reach of public equity investors, such as charities, government agencies or privately owned businesses. The Fund’s exposures extend from social housing charities providing affordable rents to those in need, to utilities playing a vital role in the energy transition. The fund also lends to a range of community funding banks, with strong franchises in mortgage and SME lending as well as Insurers, offering protection products.
The Fund will be managed by Shalin Shah, Senior Fund Manager, and Matt Franklin, Fund Manager, members of RLAM’s market-leading Sustainable Investment team, whose investment process has evolved over 20 years and is further supported by the insights of an independent External Advisory Committee.
Shalin Shah, Senior Portfolio Manager of the RLAM Sustainable Short Duration Corporate Bond Fund, commented: “The increasingly important role of sustainability on corporate agendas offers investors opportunities to access assets that can meaningfully contribute to both their return objectives and sustainable goals. We believe our approach, focusing on high quality, short duration assets, offers an attractive solution for investors seeking new sources of yield within a robust portfolio able to minimise exposure to downside risks.”
Rob Williams, Chief Distribution Officer at RLAM, added: “The launch of the Sustainable Short Duration Corporate Bond Fund builds on our established range of Sustainable Investment solutions which continue to see strong levels of interest from a broad range of investors. Its launch reflects our continued commitment to providing our clients with relevant solutions to meet their long-term return and sustainability goals.”
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The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.