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Strategic Bond
This is a core corporate bond strategy that brings income generation and diversification to balanced portfolios. It offers broad exposure to global corporate bond markets, using our best ideas. We seek to add value through bond selection and active credit risk management.
Our research-intensive process and extensive experience mean we gain deep insight into companies, differentiating our views from other market participants.
A sharp focus on inefficiencies
Our goal is to provide clients with a resilient income and potential capital growth by lending to a diverse range of companies.
Corporate bond markets exhibit persistent structural inefficiencies. Our approach is designed to exploit these. We find companies offering attractive compensation relative to their strengths, creating a portfolio that we believe will outperform the market in the long term.
Strategic Bond Q1 investment update
The Strategic Bond Team reflects on recent performance, portfolio changes and market developments over the last quarter.
A purposeful, conviction-led portfolio
The global corporate bond market, with over 3,700 companies and more than 20,000 bonds, provides a rich canvas of opportunities for active bond selectors.
Through deep research, we seek to identify resilient companies that can adapt as societies and technologies change. We blend this with our top-down view of the economic environment. Our collaborative approach helps us to identify macroeconomic trends and transitory forces. We then construct a diverse core portfolio of about 60-85 companies.
A patient and flexible approach
While we typically lend to companies for many years, we remain live to evolving market conditions, actively managing exposure by region, sector and credit rating to make the best of prevailing valuation opportunities.
Corporate bond markets are structurally inefficient and often fail to reflect fundamental information. This provides opportunities for long-term investors such as us.
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Strategy portfolio holdings
A list of the top 10 holdings that the representative portfolio invests in.
All figures up to: 31 August 2024
| # | Holding | % of portfolio |
|---|---|---|
| 1 | Rothesay Life 8% 2025 | 3.0% |
| 2 | EDF 6% 2026 Perp | 2.9% |
| 3 | DNB Bank 4% 2026/27 | 2.8% |
| 4 | Bharti Airtel 5.65% 2025 Perp | 2.5% |
| 5 | CPI Property 1.5% 2031 | 2.3% |
| 6 | Investec 2.625% 2026/32 T2 | 2.2% |
| 7 | Barclays 7.125% 2025 Perp AT1 | 2.2% |
| 8 | Banco Santander 1.5% 2026 | 2.1% |
| 9 | Helvetia 2.75% 2031/41 T2 | 2.1% |
| 10 | Admiral Group 8.5% 2034 T2 | 2.1% |
Please note
The information contained on this page is intended as a guide only and should not be relied upon when making investment decisions. All holdings information is unaudited. Source Baillie Gifford & Co. Please note that totals may not add due to rounding.
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Curious to learn more about our products and what we can offer you? Please get in touch.