Investment Profile

looking to invest the probable rather than speculate the possible

Investment Profile

looking to invest the probable rather than speculate the possible

We comment on the evolution of our investments regularly in Fund Quarterly Reports. But the following profile would be indicative and characteristic of the fund over the full business cycle. All our investments are listed public securities and generally issued by larger capitalised companies so their transparency of risks and market liquidity may be considered higher than average.

The Fund prospectus sets out the investment mandate as investing ‘predominantly’ in corporate bonds and equities in world markets and this means typically upto 80% across the two asset classes. Equities are usually between 50-60% of the Fund (limit 70%). A broad variety of other investments like inflation-linked government bonds, exposure to precious metals, money market instruments, some limited foreign currency that may be unhedged, and cash may also be invested.

The Investment Association category to which the Fund belongs is the Mixed Assets 20-60 sector, denoting the through-cycle range of equity exposure for funds in the sector.

The maximum size of any individual company investment we would make in the Fund at any time would be 5% though investment in government bonds may exceed this (as provided by UCITS investment limits).

Investment Style

Our investment philosophy tries to identify strong companies with attractive growth prospects who generally share the proceeds of growth and profitability with shareholders in the form of dividends, but otherwise there is no particular style bias of ‘value’ or ‘growth’ or ‘income’ investing. Of primary importance to this process is that we identify sustainable sources of return, so this also means we tend to capture high environmental, social and governance factors (ESG) in the companies we invest. We engage with our investee companies to understand how they think about these issues and their broadest stakeholder community obligations.

The credit risk of corporate bonds – the risk the issuer may default on its borrowings – can be below what is defined as investment grade, down to single ‘B’. Sometimes this credit risk can provide risk-adjusted returns that are comparable with equities and relatively attractive. We comment on the average credit risk and years to maturity of the bond investments in Quarterly Reports. There can also be short term squeezes on the liquidity of some corporate bonds but these tend to happen at times of more accute stress in equity markets, so we may use these occasions to add to corporate bonds when they are most attractive and de-risk the Fund at the same time.


The capitalisation of companies we invest in, whether equity or bond, tends to fall within the larger capitalisation bands of the public markets, on average in excess of £20-30bn. We also comment on the capitalisation of the equity investments in the Quarterly Factsheets.


Overseas investments in the Fund involve currency risks, principally to the GBP/USD, GBP/EUR, GBP/YEN, GBP/CHF exchange rates and we try to maintain these risks to between 15% to 30% non-GBP of the fund on average, with an upper limit of 50% at any given time. The residual currency risk is hedged back into pound sterling to reduce some of the  volatility of global investment returns. Maintaining modest amounts of currency exposure over the long-term can be a useful diversifier of inflation risk for UK investors, as inflation induces weakness in the GBP exchange rate it generates investment gains from foreign currency holdings.

Derivatives are permitted in the Fund for the purposes of efficient portfolio management and efforts to reduce market risks from time to time.

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