The changing landscape of sterling credit

ESG investing started as an equity specialism, and much of the data and analysis used today is still centred on equities, so are ESG factors relevant for corporate bonds and what role do Green bonds play? Martin Foden explores this and discusses sustainable fixed income investing and how two distinct processes – ESG and credit analysis – can be integrated to seek to achieve positive outcomes for investors.

Distinct and clearly-defined investment approaches have been stretched and morphed to make sustainable investing appeal to a much wider investor base. But what does Sustainable really mean, and how does Mike Fox and his team put it into effect at Royal London Asset Management (including some stock stories that might surprise you)?

The great thing about global equities is that it’s a big world out there, the main challenge with global equities is that it’s a big world out there.
With a universe of 5,000+ potential investments we have developed a differentiated, proven and repeatable process to find differentiated stocks off the beaten track to seek to drive a successful long term track record. Peter Rutter explains how we do that and why it's valuable to clients.

Recent research indicates that despite the growing popularity of responsible investing, the confusing landscape can be a barrier to holding the conversation with investors. Ashley Hamilton Claxton, Head of Responsible Investment, tracks the evolution of responsible investing, demystifies the various labels attached to investment funds, and discusses how understanding the primary investment objective of funds can help with the client conversation.

The last decade has seen huge developments in sustainability across much of the globe, and this is having a growing influence on the way investments are managed. The key change was the growing realisation that applying ESG factors and looking at sustainable themes was beneficial for returns – it doesn’t require investors to make costly choices. But what do the coming years have in store? Mike Fox examines how sustainability will develop over the next coming years.

The terminology can be confusing – what is the difference between sustainable and responsible, for example? The sector’s newly-fashionable status has led to some blurring of the terminology in the scramble to launch new products. So Mike Fox describes the sustainable investing landscape and explains the benefit of doing right rather than avoiding the bad.

The past 24 months have provided a fantastic testing ground for multi-asset credit (MAC) strategies. The period has featured interest rate volatility, liquidity shocks and multiple blow ups in the high yield sector, against a backdrop of deteriorating global economic data, trade concerns, monetary policy tightening, Chinese weakness and Brexit. In this turbulent environment, Khuram Sharih, Fund Manager, and Chris Mills, Consultant Relations Manager, examine the key drivers and events that have shaped the strategy. They shed light on the strategic changes in the portfolio positioning, the importance of credit selection in the search for stable income, and how the strategy can manage increased volatility and continued low rates.

In this webinar, Head of Sustainable Investments, Mike Fox, will look at sustainable investment and technology. Mike will consider the arguments for and against ‘Big Tech’ in society and how to integrate the social considerations around technology into financial decision making.

Senior Client Portfolio Manager, Ewan McAlpine, presents our six monthly update webinar. The clouds of uncertainty six months ago have anything but cleared. Against an increasingly lacklustre global economic backdrop, and with additional uncertainty in the UK and Europe around Brexit and more globally around US-China trade, fixed income assets and their returns have proved surprisingly resilient in general and market volatility is surprisingly low. But the nature of uncertainty means that the risks of volatility and poor performance even in the near term have not been removed. Find out what we consider to be the most appropriate strategies to see investors through this environment of mixed messages.

Differentiated stock selection across the corporate Life Cycle has allowed the Global Equity strategy to outperform in the last three years, despite a the process focus on a valuation discipline leading to an overweight to value and valuation factors. As a result of stock picking, the strategy was able to outperform in both 2016 and 2018 despite these being very different years for market styles. In this webinar, the Head of Global Equities Peter Rutter recaps on this investment process and demonstrates the power of investing across the corporate Life Cycle with the team’s differentiated process. The framework is brought to life through three stock examples, each at a different stage in the Life Cycle.

Senior Fund Managers, Tony Cole and Richard Nelson, will discuss their views on rates over the last six months and their thoughts on credit market supply. They will also share their expectations going forward as Brexit approaches and provide listeners with an update on our cash solutions offering.

Senior Credit Analyst, Sebastien Poulin, provides an overview of collateralized loan obligations (CLO). He explores the lifecycle of a CLO and how they fit as a part of our Multi Asset Credit Fund strategy.

With growth stocks outperforming value stocks for the majority of the last decade, Peter Rutter takes a look at the reasons behind this continuing trend. While these specific dynamics don’t seem to be shifting, there are other significant changes the team have identified in equity markets. Peter notes that the team’s valuation discipline and investment process is continuing to help them identify interesting opportunities.

Will Kenney, Senior Fund Manager, presents our latest global equity monthly update, discussing recent volatility in the market and the catalysts for this. He describes how the factors at the core of their investment process are helping the team to identify opportunities amidst this current period of volatility and the higher discount rates associated with it.

Ewan McAlpine, Senior Client Portfolio Manager is joined by Head of Fixed Income, Jonathan Platt, Head of Rates and Cash, Craig Inches and Head of Global High Yield, Azhar Hussain to discuss their views on fixed income markets as we look ahead to 2019.

Will Kenney, Senior Fund Manager, presents our latest global equity monthly update, discussing recent volatility in the market and the catalysts for this. He describes how the factors at the core of their investment process are helping the team to identify opportunities amidst this current period of volatility and the higher discount rates associated with it.

Peter Rutter, Head of Equities will be focusing on the factors that influence how RLAM’s Global Equity funds perform and how these fit with clients’ wider portfolios. In previous webinars Peter has introduced the differentiated and proven investment process employed by the RLAM Global Equity fund managers. This process leads to differentiated portfolios with performance driven by stock selection and some clear and consistent style and factor characteristics. In particular the funds have tended to perform best when valuation factors are outperforming and there is a risk-off environment in equities. Peter will explain why this is consistent with the investment process and consequently how the portfolios might fit a strong complement to managers with more global growth and larger cap exposures in global equities.

Fund Manager, Khuram Sharih shares our latest update on multi asset credit. During the webinar Khuram will update on this area of the market before turning to the current positioning of the Royal London Multi Asset Credit Fund.

There’s a temptation to think that both equity and credit investors should look at ESG in the same way. This approach can lead to a quicker roll-out, as existing, more established equity process can just be used for credit analysis.

In this session, RLAM's Ashley Claxton and Martin Foden will explain why they think that the scope and application of ESG factors is quite different: from the different make-up of bond indices, to the subtleties of bond structure, a differentiated approach has to be taken. The only similarity? That if ESG is seen as an ‘extra’ part of your security analysis, you’re probably not doing it right.




Ashley Hamilton Claxton is responsible for coordinating and overseeing RLAM’s approach to responsible investing across all of our asset classes. She has management responsibility for our company engagement, corporate governance analysis, and proxy voting. Ashley is RLAM’s subject matter expert and spokesperson on responsible investing and corporate governance.

Martin Foden joined RLAM at the start of 1998. He initially joined RLAM's UK Equity Team, with responsibility for analysing the transport, business services and construction sectors, as well as managing balanced pension funds. This experience greatly enhanced RLAM’s credit research capabilities when he joined the Fixed Income Team at the beginning of 2003. Since moving to the Fixed Income Team, he has been instrumental in developing RLAM’s analytical process through the advancement of the team’s cashflow forecasting and evaluation of issuer structures.