Sanlam Credit Fund

We aim to deliver a consistent level of income for our investors with a low or medium level of volatility.

Whilst the fund is in the IA’s Sterling Strategic Bond sector, we believe it would work equally well as a core allocation to financial and non-financial credit, given the fund’s average IG credit rating.

Our investment approach is built around three core components, namely:

• Predictable, secure income from a fully diversified credit portfolio
• A short duration stance – that is, low sensitivity to changes in risk-free rates, which helps minimise the risk of large drawdowns
• Earnings visibility of the underlying credit holdings

The above three elements are blended with rigorous credit analysis and our extensive knowledge of the primary (new issues) market, which adds a further source of return potential and diversification for the fund. When taken together, they enable us to create what is, in effect, an ‘all weather’ long-only credit portfolio.

Environmental, Social and Governance

Whilst the fund is not marketed as an “ESG” or “sustainable” bond fund, it is managed with ESG considerations as we believe this enables us to maintain our performance whilst improving the average integrity of our portfolio companies.

As part of our ESG strategy we:

1. Watch list certain industries which screen negatively but where we have flexibility to allocate on a comparative basis
2. Allocate capital to firms that are doing the right things by ensuring their business are sustainable
3. Engage regularly with firms in our universe, which enables a deeper and more valuable understanding of our investment environment
4. Operate on a transparent basis, recognising the impact that our choices can have on society, the environment and communities.