100 Club Awards 2016: Sterling Corporate Bond Fund
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L-R: Taha Lokhandwala, news editor at Investment Adviser, Gary Higgs, business development manager, advisory, London at M&G Investments, and Richard Romer-Lee, managing director at Square Mile Investment Consulting & Research
One of the larger corporate bond funds, the £4.7bn M&G Corporate Bond fund has been managed by Richard Woolnough since February 2004. Ben Lord is deputy fund manager, and the managers are assisted by an in-house team of credit analysts in the selection of individual bond issues.
Launched in April 1994, the fund invests mainly in high-quality corporate bonds, with the aim of delivering a higher income and capital growth than that available from investing in UK government fixed income securities of similar maturities. The managers may also hold up to 20 per cent of the portfolio in other fixed income investments.
This fund won this category on its debut in this year’s 100 Club, impressing the judges on the grounds that it provides greater flexibility than other top performers.
Data from its latest factsheet for September shows the vehicle has a modified duration of 7.1 years and a distribution yield for the accumulation share class of 3.19 per cent. Meanwhile, the average credit rating for holdings in the fund is A-, and the credit rating breakdown shows the portfolio’s largest net allocation is to BBB-rated securities at 50.1 per cent.
The fund has a broad spread of maturities among its holdings, with 24.1 per cent allocated to bonds with a maturity of 15 years or more, while 11 per cent have a maturity of between three and five years.
What the judges say
This high profile portfolio offers greater flexibility than many of its counterparts.
