You are currently using Internet Explorer. This website is optimised for Google Chrome, Mozilla Firefox and Microsoft Edge. You can download Chrome here, Firefox here or Microsoft Edge here.
A globally invested fixed income fund that is managed without constraints with a view to maximising total returns. The flexibility of the mandate permits the use of a wide range of instruments and investment strategies. Within its sector, the fund features in our 'High Conviction' category.
The fund’s KIID Synthetic Risk and Reward Indicator (SRRI) is 4. This is a regulatory measurement that is, where possible, calculated from the volatility of its weekly performance over a five-year period. A score of 4 means the fund’s historic volatility is between 5% and 10%.
The fund’s risk statistics are broadly in keeping with other funds in the sector, notwithstanding periods of idiosyncratic behaviour. Different share classes could have differing SRRI scores.
The fund is managed by Dickie Hodges, who is Head of Unconstrained Fixed Income at Nomura Asset Management. He joined in 2014 from Legal & General Investment Management, where he managed the well-known Dynamic Bond Trust. He is supported by Kaoru Naganuma (on convertibles), Victoria Robinson (on derivatives, rates and hedging) and Kliment Toshev. The team also has access to the global credit teams across the wider Nomura group.
The manager believes that an unconstrained approach to investing in fixed income allows for the greatest possible diversification of instruments and investment strategies. A dynamic asset allocation approach, combined with a very broad investment mandate, is the means by which he pursues the objectives of yield generation ahead of cash with the potential for capital gain, but with lower volatility than conventional bond indices.
The core allocations are to investment grade bonds, high yield bonds and convertibles (up to 20%) and these are complemented by hedging strategies. Duration is actively managed, with a great deal of flexibility on both the scale and focus of any chosen positioning. Risk management is an integrated part of the investment process but in addition, there are regular formal meetings with the Head of Fixed Income and other risk and review committees.
The manager's top-down assessments are the driving force of the process and, in executing investment strategies, he accesses a wide range of fixed income sectors and deploys derivative-based hedging techniques. He begins by formulating a medium to long-term investment view, taking into account interest rates, economic and corporate fundamentals. This drives the asset allocation preferences, but any selected investment must also have the capacity to be hedged, from either an interest rate or credit spread perspective. Where the credit analysts have strong preferences or high conviction views, these are fed into the sector outlook or views on the broader economy. Shorter-term strategies are also featured where opportunities arise from themes, technicals or valuations.
In combining the strategies, the manager assesses risk and return potential, correlations and time horizons and uses a wide range of hedging strategies to mitigate and control unwanted risks.
Formal documentation, including the fund prospectus and the KIID, should be sought directly from the asset manager. For ease of reference, a link to the ASSET MANAGER WEBSITE can be found above, as well as a link to the ASSET MANAGER FACTSHEET.
At The Adviser Centre, our primary aim is to support financial professionals in their fund selection and suitability work through independently-minded research, borne of decades of industry experience. Our process is framed by the fundamental concepts of “quality”, “value” and “utility”, through which we answer the key questions of why to invest in a fund, how it is likely to behave and how it can be deployed.
The Adviser Centre team members are some of the most experienced in the fund research industry. We can always look forward to robust and constructive discussions and we have great respect for their views and perspectives, which, given the breadth of their fund and market knowledge, come from an extremely well-informed position.
We have known and worked with the team for several years and we value their experience and the insights they provide to our own investment process. The service differentiates itself by its more focused nature and the information on their factsheets is useful in emphasising a fund’s key mandate, exposure and style biases, helping to explain the risk/return journey that our customers can expect.
© The Adviser Centre | All Rights Reserved. The Adviser Centre is a trading name of Embark Investments Limited and is not authorised to carry out regulated activities. Embark Investments Limited is a company registered in England (No. 03383730) and a wholly owned subsidiary of Embark Group Limited, with its registered office at 33 Old Broad Street, London, EC2N 1HZ. Embark Investments Limited is authorised and regulated by the Financial Conduct Authority (Registration No. 628981). This website is provided by The Adviser Centre and is a service for financial professionals only. Information on this website, including data and information from asset managers and third party sources, is deemed to be correct at the time of publication but The Adviser Centre takes no responsibility for its accuracy. Opinions are stated honestly and with careful consideration but they can change at any time and should not be solely relied upon. Information featured on the website does not constitute financial or investment advice.
Your use of this website is subject to the terms of use set out in the website. By continuing to use our website we will assume that you are happy to receive non-privacy intrusive cookies. Please be aware that if you disable cookies some functionality on the site will not work. Read our cookies policy to find out more about our cookie use and how to disable cookies.
Alternatively, if you are not a financial professional and are seeking financial advice, you may wish to visit unbiased.co.uk to search for a financial adviser.