Fact sheet: Royal London Sterling Extra Yield Bond

Rated Fund Information
Rated Funds Group
?Money Observer has arranged all its Rated Funds into easy to understand Rated Fund Groups, comprising funds and investment trusts.
STERLING BONDS
Sector
FO Fixed Int - GBP High Yield
Fund type
OEIC
Primary aim
INCOME
Why Money Observer Rates Royal London Sterling Extra Yield Bond

Rated Fund 2013-2017. A high yield with an emphasis on security

This fund won Money Observer's Best Larger Sterling Bond Fund award in 2014 and was highly commended in 2016. It certainly lives up to its name with a yield currently of over 6 per cent. Income is paid quarterly. It is managed by Eric Holt and invests in a broad range of fixed interest securities, including unrated bonds.

It is highly diverse with over 200 holdings. The aim is to provide investors with a high yield without taking the degree of risk normally associated with high-yield funds. For this reason, Holt also favours bonds secured against specific assets.

His main aim is to exploit bond market inefficiencies. He believes that by considering a wider investment universe than many of his peers, he can uncover value in many areas that are often overlooked, including unrated and asset-backed bonds and loans. He does not rely on bonds' credit ratings.

The main question for him is whether there is sufficient reward for the risk being taken. In practice this means that the portfolio will hold untypical bonds, such as unrated bonds, smaller issue size bonds, sub-investment grade bonds and non-sterling bonds, where he believes valuations are attractive. He says this approach also allows him to focus on investing for the longer term.

Despite mixed feelings towards this asset class among investors, at the end of 2016 Holt argued the pricing of corporate bonds was still very attractive over the medium term, and their level of income generation was also appealing.

3 Year Performance
Fund Performance26.6%
Average of Rated Funds Group17.7%
Sector Performance2.7%
Fund information
Fund name
Royal London Sterling Extra Yield Bond A Inc
Fund manager company
Royal London Asset Mgmt (IRL)
Fund type
OEIC
Fund manager
  • Eric Holtsince 10/04/2003
Accolades
Highly Commended - Sterling Bond - Larger Funds
Fund objective
The Fund’s objective is to achieve a high level of income. The Fund seeks to achieve a gross redemption yield (GRY) of 1.25 times the gross redemption yield of the FTSE Actuaries British Government 15 Year index.
Benchmark
  • FTSE Actuaries British Government Over 15 Years Index
Investment style
Active,High Yield
Investment method
Fixed Interest
Quick stats
1 Year return
9.9%
1 Year rank in sector
1/4
Sector
FO Fixed Int - GBP High Yield
Yield
-
Ongoing charge (OCF)
?A fund’s ongoing charges figure (OCF) is similar to the old-style total expense ratio. It reflects the annual charge to investors in the fund, in percentage terms, but does not include extra performance-related fees (where these are levied) or the fund’s trading expenses on its underlying investments.
0.83%
Fund size
£1,558m (£1,439m last year)
FE Risk score
?FE Risk Scores measure the riskiness of instruments relative to the FTSE 100 index of shares. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. Cash-type investments will have scores close to zero. Funds will tend to have scores in the 0-150 range. The FTSE 100 is always scored at 100. There is no upper limit.
24
Top in this sector
Fund name1 Year
Royal London Stg ExYdBd9.9%
Marlborough HiYld Fix Int Cell3.7%
AXA WF Europn Hi Yd Bds2.8%
Royal London Gbl HiYld Bnd2.2%
Royal London ShtDr GblHY Bd1.5%
...more in FO Fixed Int - GBP High Yield

Performance snapshot

Holdings snapshot

  • UK77.4%
    USA14.2%
    Europe4.7%
    Norway3%
    Sweden0.6%
  • Financial Services23.8%
    Structured Products22.5%
    General Industrials20.1%
    Insurance11.2%
    Utilities8%
  • Global Corporate Fixed Interest94.5%
    International Equities5%
    Global Index Linked0.3%

Fund also available on these pension platforms:

Performance vs Sector

Cumulative performance
 1 mth3 mth6 mth1 yr3 yr5 yr
Fund-1.4%0.2%2.2%9.9%26.6%49.6%
Sector-1.2%-0.2%0.5%4%2.7%15.3%
Rank within sector4 / 51 / 51 / 51 / 41 / 41 / 1
Quartile4th1st1st1st1st
Calendar performance
 YTD - 20182017201620152014
Fund-0.8%14.3%10.4%2.4%8.1%
Sector-0.8%3.5%5.4%-3.5%6.9%
Rank within sector2 / 51 / 41 / 43 / 41 / 4
Quartile2nd1st1st3rd1st
Risk statistics
Alpha
?Alpha is a measure of a fund's over- or under-performance by comparison to its benchmark. If the Alpha is 5, the fund has outperformed its benchmark by 5%; so the greater the Alpha, the greater the outperformance.
8.06
Beta
?Beta estimates a fund's volatility by comparison to that of its benchmark. A fund with a beta close to 1 means that the fund will move generally in line with the benchmark. Higher than 1 and the fund is more volatile than the benchmark and vice versa.
0.49
Sharpe
?This commonly-used measure calculates the level of return over and above the return of a notional risk-free investment, such as cash. The difference in returns is then divided by the fund's volatility. The resulting ratio is an indication of the amount of excess return generated per unit of risk.
1.22
Volatility
?Volatility (or standard deviation), when applied to an investment fund, expresses its risk. It shows how widely a range of returns varied from the fund's average return over a particular period. For example, if a fund had an average return of 5%, and its volatility was 15, this would mean that the range of its returns over the period had swung between +20% and -10%.
4.13
Tracking error
?This measures the standard deviation of a fund's excess returns over the returns of an index or benchmark portfolio. As such, it can be an indication of 'riskiness' in the manager's investment style. A Tracking Error below 2 suggests a passive approach. At 3 and above the the manager will be deploying a more active investment style.
4.27
Information ratio
?This is a useful risk-adjusted measure of actively managed fund performance. It is calculated by deducting the returns of the fund's benchmark from the fund's overall returns, then dividing the result by its tracking error. The higher the Information Ratio the better. It is generally considered that a figure of 0.5 reflects a good performance, 0.75 very good, and 1.00 outstanding.
1.76
R-Squared
?An indication of how closely correlated a fund is to an index or a benchmark. Values for R-Squared range between 0 and 1, with 0 indicating no correlation at all and 1 showing a perfect match. Values upwards of 0.7 suggest that the fund's behaviour is increasingly linked to its benchmark.
0.39
Price movement
52 week high1.23
52 week low1.16
Current bid price-
Current offer price-
Current mid price1.2
Region
1UK77.4%
2USA14.2%
3Europe4.7%
4Norway3%
5Sweden0.6%
6Canada0.1%
Industry sector
1Financial Services23.8%
2Structured Products22.5%
3General Industrials20.1%
4Insurance11.2%
5Utilities8%
6Consumer Services7.3%
7Telecommunications2.8%
8Consumer Goods2.3%
9Real Estate1.9%
Asset type
1Global Corporate Fixed Interest94.47%
2International Equities5.04%
3Global Index Linked0.25%
Individual holdings
1ANNINGTON FINANCE NO 5 13% BDS 15/01/23 GBP1000002.3%
2EI GROUP PLC 6.375% SEC BDS 26/9/2031 GBP10002.2%
3AMEDEO AIR FOUR PLUS LIMITED RED ORD NPV2%
4INVESTEC BANK LTD1.9%
5PREMIERTEL 6.175 SINK 08/05/321.9%
6CO-OPERATIVE GROUP HOLDINGS 20 7.5% 07/08/20261.7%
7EDF1.7%
8SANTANDER UK PLC1.6%
9FINANCE FOR RESIDENT SOCIAL HOUSING SER`1`CL`A2`AS BKD8.569%NTS 2058 144A1.4%
Management
Fund manager group
Royal London Asset Mgmt (IRL)
Fund manager company
Royal London Asset Mgmt (IRL)
Fund type
OEIC
Fund objective
The Fund’s objective is to achieve a high level of income. The Fund seeks to achieve a gross redemption yield (GRY) of 1.25 times the gross redemption yield of the FTSE Actuaries British Government 15 Year index.
Benchmark
  • FTSE Actuaries British Government Over 15 Years Index
Investment style
Active,High Yield
Investment method
Fixed Interest
Fund manager
NameSinceBiography
Eric Holt10/04/2003Eric Holt has extensive knowledge of UK investment grade and high yield corporate bonds, gained over a career spanning more than 30 years. He has overall responsibility for RLAM’s credit research process, as well as managing the Sterling Extra Yield Bond Fund and the Ethical Bond Fund. He joined RLAM in 1999 following Royal London’s acquisition of Refuge Assurance’s investment team, where he had worked for the previous 20 years. Eric is a graduate of Nottingham University with a degree in mathematics and is an associate of the Institute of Actuaries.
Compliance
Distributor Status, IA Recognised, Reporting Fund Status, UCITS IV Compliant
Domicile
No data available.
Fund for sale in
United Kingdom, Ireland, Offshore
Royal London Sterling Extra Yield Bond A Inc
Initial charge-
Annual charge0.75%
Min single investment£100,000
Min regular saving£50,000
Available in ISAYes
Ongoing charge (OCF)0.83%
Total expense ratio (TER)0.88%
Bid price-
Offer price-
Mid price1.2001
CurrencyGBP
Price updated14/02/2018
TypeIncome
Institutional or retail classInstitutional
Domicile-
Citi codeRP65
Royal London Sterling Extra Yield Bond B Inc
Initial charge4%
Annual charge1.25%
Min single investment£1,000
Min regular saving£1,000
Available in ISAYes
Ongoing charge (OCF)1.33%
Total expense ratio (TER)1.39%
Bid price-
Offer price-
Mid price1.1804
CurrencyGBP
Price updated14/02/2018
TypeIncome
Institutional or retail classRetail
Domicile-
Citi codeRP66
Royal London Sterling Extra Yield Bond Y Inc Ltd Issuance
Initial charge-
Annual charge0.32%
Min single investment£150,000,000
Min regular saving£0
Available in ISAYes
Ongoing charge (OCF)0.4%
Total expense ratio (TER)-
Bid price-
Offer price-
Mid price1.0527
CurrencyGBP
Price updated14/02/2018
TypeIncome
Institutional or retail classInstitutional
Domicile-
Citi codeK41Z
Royal London Sterling Extra Yield Bond Z Inc
Initial charge-
Annual charge0.5%
Min single investment£10,000,000
Min regular saving£0
Available in ISAYes
Ongoing charge (OCF)0.58%
Total expense ratio (TER)-
Bid price-
Offer price-
Mid price1.0704
CurrencyGBP
Price updated14/02/2018
TypeIncome
Institutional or retail classInstitutional
Domicile-
Citi codeJYCT
Data provided by

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