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Funds

Strategic Bond Fund

 

Fund Overview

The Sanlam Strategic Bond Fund aims to provide an attractive total return for investors over the long term, through a high monthly income generation and capital growth potential. Managed by Craig Veysey since its launch in March 2012, the Fund seeks to invest only in the best valued corporate and government bond opportunities from a broad global bond universe, while always maintaining a particularly keen focus on portfolio downside risks.

 

Process and Philosophy

Total return focus

  • The Fund’s objective is to provide an attractive total return for investors, through a high monthly income and capital growth potential.
  • The Fund is not constrained in its bond investments by any reference benchmark or peer group.
  • Avoidance of short-term losses will enable a superior total return over the long term.

High monthly income

  • The Fund aims to produce a particularly attractive and consistent level of income that may be paid out monthly to investors.
  • The compounding effect of a high level of monthly income is a key contributor to total returns over the long term.

Value driven credit approach

  • Core investments are in undervalued corporate bonds held for the long term, in primarily the investment grade/crossover area.
  • Our focus is particularly on attractively priced bonds, sourced from a broad global opportunity set, that can deliver both a relatively high income and comply with our low tolerance for credit risk.
  • Willing to hold bonds to maturity or until full value realised through a particular event that may have the potential for also providing capital gains.

Active macro overlay

  • Core portfolio investments are supplemented with active investment in liquid government bonds on a currency hedged and unhedged basis.
  • This dynamic overlay strategy regularly adjusts the portfolio’s duration and currency exposures in seeking to enhance portfolio total returns.

Risk control

  • Active macro overlay approach aims to also assist in limiting downside portfolio risks during shifting market conditions.
  • Limited FX risk: Maximum 20% unhedged non-sterling currency exposure.
  • Limited credit risk: Maximum 20% in sub-investment grade bonds (defined as those with no investment grade rating and does not meet our specific criteria for investment grade quality).
 

Investment Process

Credit selection

  • A key focus of the credit selection is on finding attractively priced bonds in the investment grade and higher quality section of the sub-investment grade area.
  • Our proprietary Credit Adjusted Valuation Scoring system (CAVS) is initially utilised for identifying undervalued credit sectors and specific bonds.
  • Craig and his team then thoroughly analyse all of the potential bond investments, focusing on identification of catalysts for realising the full value of the investment to bondholders over the long term.

Macroeconomic strategy

  • Core portfolio investments are supplemented with a dynamic macro overlay strategy that regularly adjusts the portfolio’s duration and currency exposures in seeking to enhance portfolio total returns.
  • Strategy meetings determine interest rate, currency and credit views. There is a particular emphasis on identifying opportunities and risks for the overall portfolio, and any necessary adjustments to bond and currency positioning.

Portfolio construction and risk control

  • Active macro overlay approach aims to assist in limiting downside portfolio risks during shifting market conditions.
  • Liquid government bonds held to ensure a balanced portfolio approach, to provide investment flexibility and for risk management purposes.
  • Currency hedging employed, but also adjusted opportunistically.

For the most up-to-date Key Investor Information Documents (KIIDs), Prospectus and Supplementary Information please follow this link.
 

How to Invest

The below application form must be completed and faxed to Sanlam Universal Funds Plc, +353 1 241 7131:

Useful Documents

Strategic Bond Fund Factsheet

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Strategic Bond Fund Brochure

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Strategic Bond Fund Application Form

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Additional Purchase Request Form

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Redemption Request Form

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Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.