Legal & General High Income Trust R

A conservatively run and well diversified US/Pan European High Yield Bond Fund.

  • 46.32p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 136.70p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.00%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.15%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 5.00%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 02 December 2020, fund data last updated 23 December 2011

This fund is structured to provide a higher level of income with lower levels of volatility by focusing more on the higher quality names in pan European and US high yield (non investment grade) corporate bond universe. Foreign currency exposure is hedged back into sterling.

Fund summary

Sector £ High Yield
Structure UNIT TRUST
Launched November, 2000
Size £1,381m
Yield 5.00%
Charging basis Income
Dividends paid 5 Feb, 5 May, 5 Aug, 5 Nov

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 1.61%
Annual management charge 1.00%
Ongoing charges figure 1.15%

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Investment process

A more cautiously structured high yield bond fund which is built with a lower exposure to high beta (highly correlated to the market) names relative to the peer group, that tends to give the fund less volatile characteristics. The process utilises both top down (global economic themes) and bottom up inputs (analysis of companies in their own right), equity price movements and bank strategy as some of the key components of bond selection. To assist in this strategy the fund will primarily target liquid issues whose ordinary shares are publicly listed. Foreign currency exposure is hedged back into sterling. The fund's proxy benchmark is the Merrill Lynch High Yield BB-B constrained (hedged).

A more cautiously structured high yield bond fund which avoids investing in the lower quality names in the high yield universe with the aim of providing less volatile performance characteristics. The fund tends to perform more strongly in weaker markets and lag in market rallies. The ability to invest in the US High Yield sector also provides the fund with diversification benefits, compared to High Yield funds focusing mainly on the smaller Pan European market. Martin Reeves became the manager in September 2011. He does not have a retail fund track record so the fund is no longer rated. Investors seeking an alternative high yield bond fund should consider our 5 star rated funds in this sector.

Manager research

Average monthly relative returns

  • 15/16 -0.02%
  • 16/17 0.12%
  • 17/18 -0.10%
  • 18/19 -0.13%
  • 19/20 0.05%

Bestinvest MRI

  • 3 years -0.06%
  • 5 years -0.02%
  • Career -0.06%
  • 3 years 41.70%
  • 5 years 56.00%
  • Career 39.70%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Martin Reeves

Reeves joined LGIM as Head of Global High Yield in 2011. Before this he ran Credit Research at Alliance Bernstein where he worked since 1998. Prior to Alliance Bernstein Reeves was Head of US High Yield Research at UBK Asset Management and a Chartered Accountant with Ernst & Young. He holds an MA in Economics from Cambridge University, St Catharine’s College.

Track record

Martin Reeves has 9.1 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.06%. During the worst period of relative performance (from October 2011 - March 2020) there was a decline of 10% relative to the index. The worst absolute loss has been 17%.

Periods of worst performance

Absolute -17.00% (January 2020 - March 2020)
Relative -10.00% (October 2011 - March 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 May 2020

2.3% Petroleos Mexicanos
2% Evergrande Real Estate Group Ltd
2% Teva Pharm Finance Llc
2% Transdigm Inc
1.8% Petroleo Brasileiro Sa
1.4% Commscope Holding Co Inc
1.3% Endo Pharmaceuticals Holdings Inc
1.3% Sprint Communications Inc
1.2% Freeport Mcmoran Inc
1.2% Iceland Topco Ltd
Source: Trustnet

Sector breakdown

Others 35.00%
Energy 16.00%
Building & Construction 11.00%
Health Care 7.00%
Media 6.00%
Automotive 6.00%
Telecommunications 5.00%
Leisure 5.00%
Leisure 5.00%
Food, Beverages and Tobacco 4.00%

Portfolio

The portfolio typically consists of 120 holdings with an average credit quality of BB, split 60/40 between US and Pan-European High Yield. Invariably there is no exposure to CCC rated debt.

Constraints

Max exposures: 2% per issuer, 50% in B credits, 30% per sector and 70% in US dollar denominated issues.

Key Investor Information - Income

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Key Investor Information - Accumulation

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