The fund will be managed by head of fixed income Jonathan Platt and has been designed with a range of clients in mind, particularly IFAs and wealth managers, the firm said.
It will invest in a number of underlying Royal London credit and high yield portfolios, with the option to hold up to 30% of the resulting portfolio in individual bonds and other fixed income securities.
The fund will also be able to invest in unrated securities, gilts and foreign sovereign debt.
Sitting within the IA Sterling Strategic Bond sector, the fund has a flexible remit and aims to deliver an income of 5%, “with opportunities for capital growth”.
The company said that by using RLAM’s “well-established fixed income range, the new offering exploits the inefficiencies inherent in credit markets which result from over-reliance on liquidity, credit ratings and orientation towards benchmarks”.
Flexible and diversified
Platt said: “This fund allows us to translate RLAM’s unique credit philosophy, with a strong emphasis on active management, rigorous analysis of fundamentals and genuine stock selection, into a flexible and diversified new offering.”
Phil Reid, head of wholesale at RLAM, added: “As we have expanded our distribution footprint in the advisory segment, many intermediaries are looking for investments paying a monthly income, which is how several of their clients manage their finances.
“We have seen a great deal of client demand for a solution that blends our existing credit capabilities to deliver this. By pooling the cash flows available from a range of fixed interest asset classes and distributing these in a smooth and regular manner, the new fund will meet this demand for a sustainable level of income.”
