RL Sustainable Short Duration Corporate Bond Fund: one year on…

What are the biggest challenges and successes you’ve had over the last 12 months?

A background of central bank rate hikes and volatile, rising yields is never easy for bond investors. It typically comes with greater recession risk too, so confidence in the quality of your lending decisions, driven by rigorous in-house credit analysis becomes more vital than ever.

But for the fund, this volatility has created opportunity too. We all know that markets can over-react, such as around the collapse of Credit Suisse, when investors extrapolated the Swiss banks specific issues to the wider financial system. Our sustainable process means we didn’t lend to a bank with such fundamental governance and control issues, but the wider volatility created opportunities to add to high quality, well capitalised banks that we do like, simply at more attractive levels.

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This is a financial promotion and is not investment advice. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. Portfolio characteristics and holdings are subject to change without notice. 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.

The Fund is a sub-fund of Royal London Bond Funds II ICVC, an open-ended investment company with variable capital with segregated liability between sub-funds, incorporated in England and Wales under registered number IC001128. The Authorised Corporate Director (ACD) is Royal London Unit Trust Managers Limited, authorised and regulated by the Financial Conduct Authority, with firm reference number 144037.