The investment objective of the Strategic Bond Fund is to provide a total return by investing in a broad range of fixed income securities and associated derivative instruments. The Fund will take strategic asset allocation decisions between countries, asset classes, sectors and credit ratings.
The Fund may also make use of one or a combination of instruments / strategies in order to achieve the Fund’s objective.
Instruments may include, but are not limited to global fixed and floating rate securities, asset and mortgage backed securities, convertible bonds, structured notes, exchange traded derivatives, OTC swaps (such as interest rate swaps, credit default swaps, credit default swaps on indices and total return swaps), forward foreign exchange contracts and preferred stocks.
Strategies may include, but are not limited to duration, sector, security, yield curve, credit and currency strategies for investment and hedging purposes.
The Fund may invest up to:
• 100% of its net assets in non-investment grade securities including up to 20% of its net assets in distressed debt securities.
• 10% of its net assets in loans qualifying as money market instruments in accordance with the Section ‘Investment Restrictions’ of this Prospectus.
• 20% of its net assets in contingent convertible bonds.
• 50% of its net assets in total return swaps.
OTC swaps may be used to increase or reduce the Fund’s market exposure. The Fund may use credit default swaps to manage exposure to a given issuer or sector by either selling protection to increase exposure (i.e. long position in the underlying), or buying protection to reduce exposure (short position in the underlying). The Fund may use credit default swaps on individual issuers, or credit default swaps on indices which are standardised contracts on a basket of issuers.
Total return swaps are unfunded. The underlyings to such total return swaps consist of a range of securities or indices that the Fund may invest in according to the Fund’s investment objective and policy, including but not limited to, government bonds, corporate bonds and secured debt. Total return swaps are used to achieve the investment objective of the Fund.
The Fund may also invest up to 10% of its net assets in equities.
The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested.
Potential investors must read the prospectus, and where relevant, the key investor information document before investing.
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