The LF 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.
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.
The LF 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.
Senior Fund Manager, Fixed Income
Michael joined Canada Life Investments from university in 2004 as a credit analyst and was promoted to fund manager in October 2007.
Michael holds an MA in Maths and Management Studies and a Postgraduate Diploma in Computer Science and Economics from Cambridge University. He is a CFA charterholder and a member of the CFA Society of the UK.
Fund Manager, Liquidity
Steve joined Canada Life Investments in 1996 and took on responsibility for the cash funds in 2002.
Since 2010, Steve’s role has expanded to encompass managing on balance sheet assets and providing liquidity coverage for Canada Life Investment and its subsidiaries. Steve is a fellow of the Chartered Institute for Securities and Investments.
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.
+44 (0)20 7415 6490
INVESTOR SERVICES AND DEALING TEAM
T: 0345 606 6180 (Mon-Fri, 08:30 - 17:30)
Dealing: Select Option 1
Enquiries: Select Option 2
Fax: 0113 224 6001
Please note that calls may be recorded for training and monitoring purposes
CANADA LIFE INVESTMENTS HEAD OFFICE
T: +44 (0)20 7415 6490