The investment objective of the Total Return Bond Fund is to target a positive total return, in excess of cash over a rolling three year period, through income and capital gains by investing in a broad range of global fixed income asset classes and associated derivative instruments.
The Fund may make use of a variety of instruments / strategies in order to achieve the Fund’s objective including, but not limited to, floating rate notes, forward foreign exchange contracts (including non-deliverable forwards), interest rate futures, bond futures and OTC swaps (such as interest rate swaps, credit default swaps, credit default swaps on indices and total return swaps), and options.
The Fund may invest up to 10% of its net assets in loans qualifying as money market instruments in accordance with the Section ‘Investment Restrictions’ of this Prospectus. The Fund may invest up to 30% of the Fund’s total net asset value in asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”), including up to 10% of its net assets in non-investment grade ABS and/or MBS. ABS/MBS include, but are not limited to, residential mortgage-backed securities, commercial mortgage-backed securities, and collateralised loan obligations. The ABS and MBS may be leveraged.
The Fund may invest up to 20% of its net assets in contingent convertible bonds.
The Fund may invest up to 50% of its net assets in total return swaps. The 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.