CF Canlife Short
Duration Corporate
Bond Fund

The CF Canlife Short Duration Corporate Bond Fund is a diversified fixed income portfolio consisting primarily of short duration investment grade corporate debt. This fund has two main priorities – a strong focus on capital preservation and sustainable income. The fund seeks to hold solid corporate bonds from issuers with strong long-term credit records, while offering good diversification.

Reasons to recommend

LESS SENSITIVITY TO HIGHER RATES
With corporate bond yields at historically low levels, any potential move higher in rates – or a widening of spreads – can have a meaningful impact on investor returns. Investing in short duration corporate bonds can minimise sensitivity to rising yields, while dampening down the impact of credit market volatility.

CAPITAL PRESERVATION AND SUSTAINABLE INCOME
Our philosophy is founded on the strong belief that the avoidance of bad credits is critical to success. The managers have a conservative, low-risk style, focusing on capital preservation and sustainable income. The fund seeks to hold solid corporate bonds from issuers with strong long-term credit records, while offering good diversification.

ESTABLISHED TEAM AND STRONG CREDIT ANALYSIS
Our credit analysis team has in-depth knowledge of individual corporates and sectors, drawing on the firm’s long experience in annuity management. The team covers over 400 issuers, including all the large issuers in the sterling corporate bond market. An analyst is assigned to every issuer held in the portfolio, developing an intimate understanding of each company’s business.

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. The team also considers global trends and macro factors, such as interest rates and inflation, while analysing the domestic influences on UK bond markets.

How the fund is managed

The CF Canlife Short Duration Corporate Bond Fund is a diversified fixed income portfolio consisting primarily of short duration investment grade corporate debt. This fund has two main priorities – a resolute focus on capital preservation and sustainable income. The fund seeks to hold solid corporate bonds from issuers with strong long-term credit records, while offering good diversification.

It is diversified across sectors, an essential component of risk management. The managers do not attempt to index-match, but are aware of the fund’s sector allocations versus the benchmark.

The fund may also hold UK gilts when appropriate. The cash position will vary depending on the market outlook, but will normally not exceed 10%.

The liquidity of each potential investment will be considered in the context of the overall level of liquidity for the fund. The managers are able to buy unrated and off benchmark bonds, where the returns adequately compensate for the potentially lower levels of liquidity. Such bonds would still be assigned internal ratings from the credit research team.

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

Interested in this fund and would like to find out more?

Contact our team who will be happy to answer any questions you may have about this fund.

Tel Icon +44 (0)20 7415 6490

Email Icon contactclinvestments@canadalife.co.uk

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