Scottish Widows Strategic Income A

Investment grade and high yield corporate bonds to achieve a high level of income.

  • 104.20p
    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.

  • 222.90p
    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?

  • 3.50% 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!

  • 1.25%
    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).

  • 1.38%
    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.

  • 2.30%
    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 18 September 2020, fund data last updated 01 December 2002

A fixed interest fund aiming for a high level of income through a split of investment grade and high yield corporate bonds issued by UK or European companies. Macro economic views are formed and combined with extensive company research to identify where the relative value resides. Experienced set of investment managers influencing the portfolio.

Fund summary

Sector £ Strategic Bond
Structure OEIC
Launched January, 2002
Size £190m
Yield 2.30%
Charging basis
Dividends paid 15th day of each month

Charges

Standard initial charge 3.50%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.25%
Ongoing charges figure 1.38%

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Investment process

The fund objective is to produce a high level of income through a portfolio of investment grade and high yield corporate bonds issued by UK and European companies. A macro view is combined with a detailed look at individual securities, hence sector performance is inherently considered. The team arrive at an independant view of the credit quality of an issue from inspection of a company's balance sheet and a thorough investigation into their five year equity forecasts. After this analysis qualitative attributes will be evaluated before meeting the management. The majority of this company analysis is carried out by the credit team, but they will maintain close dialogue with the relevant in house equity analysts. A number of key characteristics are assessed including, amongst others, extent of leverage, pricing power and event risk. Finally, analysis of the current stock price is used to assess the relative value at the time, which also covers bond price drivers such as supply and demand.

Manager research

Average monthly relative returns

  • 15/16 0.43%
  • 16/17 -0.14%
  • 17/18 -0.05%
  • 18/19 0.04%
  • 19/20 -0.10%

Bestinvest MRI

  • 3 years -0.04%
  • 5 years 0.04%
  • Career 0.00%
  • 3 years 74.50%
  • 5 years 92.90%
  • Career 93.90%

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

Steve Logan / Roger Webb

Logan joined SWIP in 2001. He was formerly a career banker and whilst with Hill Samuel Merchant Bank where he worked in distressed debt workout situations. At Sumitomo Trust Logan specialised in leveraged finance in large-cap European transactions. At Standard Life he helped launch of their high yield bond fund. Logan is an A.C.I.B holds a BA (Hons) in banking and finance. Webb joined SWIP in November 2009. His earlier experience included working in Norwich Union Investment Management Ltd's venture capital operation. Webb joined the fixed income team in January 1996 after spending four years in bond fund management with Norwich Union's Spanish operation, Plus Ultra. He is an Associate Member of the Institute of Investment Management and Research.

Track record

Steve Logan / Roger Webb has 9.6 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -00%. During the worst period of relative performance (from February 2011 - December 2011) there was a decline of 9% relative to the index. The worst absolute loss has been 11%.

Periods of worst performance

Absolute -11.00% (January 2020 - March 2020)
Relative -9.00% (February 2011 - December 2011)

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 30 June 2020

2.1% Schroder Sterling Liquidity Fund X Income
1.6% Hm Treasury United Kingdom Dmo 4.25% Gilt 07/12/49 Gbp0.01
1% Barclays Plc 2.375% Reset Nts 06/10/23 Gbp100000
1% Elec France 5.875% 18 Jul 2031
.9% Lloyds Bank Plc 9.625% Subord Bds 06/04/23 Gbp(Var)(Br)
.9% Abn Amro Bank Nv 2.875% Bds 18/01/28 Eur100000
.8% Aa Bond Co Ltd Regs 4.875% 31 Jul 2024
.8% Wachovia Bank Na 5.25% 01 Aug 2023
.7% Hsbc Hldgs 6% Subord Nts 29/03/40 Gbp50000
.7% Severn Trent Utilities Finance Plc 2.75% Gtd Nts 05/12/31 Gbp100000
Source: Trustnet

Sector breakdown

BBB 41.00%
A 25.00%
BB 14.00%
B 8.00%
AA 6.00%
Non-Rated 3.00%
CCC 2.00%
AAA 2.00%

Portfolio

The portfolio typically aims to hold 70% investment grade and 30% higher yielding securitites. It may hold securities in European denominations but will usually have a heavy bias to Sterling issues. The number of holdings will be in the region of 90-100.

Constraints

The portfolio has no specific contraints but risk is monitored by a dedicated quants team using the Socrates performance measurement system. Performance target within the sector is 40th percentile or better over one year rolling periods.

Key Investor Information - Income

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Key Investor Information - Accumulation

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