SICAV (UCITS compliant)

L&G Absolute Return Bond Fund

Fund facts

Fund size
£1,094.1m
Base currency
GBP
Launch date
13 Dec 2013
Domicile
Luxembourg
Share class launch

Statistics

Modified duration
0.37 years

As at 28 Feb 2021

Fund aim

The objective of the Fund is to provide a combination of growth and income above those of the ICE BofA British Pound 3 Month Deposit Offered Rate Constant Maturity Total Return Index, the "Benchmark Index". The Fund is actively managed and aims to outperform the Benchmark Index by 1.5% per annum. This objective is before the deduction of any charges and measured over rolling three year periods.The Fund aims to generate positive returns in all market conditions.There can be no assurance that the Fund will achieve its investment objective.

Benchmark

ICE BofA British Pound 3 Month Deposit Offered Rate Constant Maturity Total Return Index

  • What does it invest in? Invests predominantly in fixed income securities, including bonds and other debt instruments, issued in in a variety of currencies by companies and governments worldwide.
  • How does it invest? Actively managed, investing primarily in debt with an investment grade (lower risk) credit rating. May also invest in debt with a sub-investment grade (higher risk) credit rating or unrated bonds. Will use derivatives extensively for investment purposes or for efficient portfolio management.

Fund updates

Performance

Source: Lipper

LIBOR is changing: read more on how future reforms of interbank offered rates may affect your investments with us.

Performance (%)
Select period:
Change

    Performance summary (%)

    As at 28 Feb 2021

    CumulativeFundBenchmark
    1 month0.550.00
    6 months2.800.02
    Year to date0.700.00
    3 years--
    5 years--
    Since launch8.330.23
    AnnualisedFundBenchmark
    1 year--
    3 years--
    5 years--
    Since launch9.98-

    As at 31 Dec 2020

    CumulativeFundBenchmark
    Quarterly1.870.02
    Year to date--
    3 years--
    5 years--
    Since launch7.580.23
    AnnualisedFundBenchmark
    1 year--
    3 years--
    5 years--
    Since launch11.35-
    Rolling 12-month performance
    Calendar year performance
    Monthly performance
    Annualised performance

    Rolling 12-month performance to last quarter end (%)

    12 months to 31 December 2016 2017 2018 2019 2020
    Fund-----
    Benchmark-----

    Calendar year performance (%)

    2016 2017 2018 2019 2020
    Fund-----
    Benchmark-----

    Monthly performance (%)

    Annualised performance (%)

    1 year3 years5 yearsSince launch
    Fund---9.98
    Benchmark----

    Annualised performance (%)

    1 year3 years5 yearsSince launch
    Fund---11.35
    Benchmark----

    Performance for the I GBP Acc unit class in GBP, launched on 27 April 2020. Source: Lipper. Performance is calculated on a Net Asset Value (NAV) to NAV basis and assumes all fund charges have been taken and that all income generated by the investments, after deduction of tax, remains in the fund. This fund has adopted a single swinging price, this means that on any given day the single dealing price will be set at either bid, offer or somewhere in between, based on whether there was a net inflow or outflow into or out of the Fund. The past performance depicted in this factsheet is based on that dealing price and therefore may appear more volatile than it would otherwise be if we were to show the notional bid or offer performance, this is as a result of the daily swing.

    Past performance is not a guide to the future.

    Performance for the I GBP Dist unit class in GBP, launched on 11 August 2016. Source: Lipper. Performance is calculated on a Net Asset Value (NAV) to NAV basis and assumes all fund charges have been taken and that all income generated by the investments, after deduction of tax, remains in the fund. This fund has adopted a single swinging price, this means that on any given day the single dealing price will be set at either bid, offer or somewhere in between, based on whether there was a net inflow or outflow into or out of the Fund. The past performance depicted in this factsheet is based on that dealing price and therefore may appear more volatile than it would otherwise be if we were to show the notional bid or offer performance, this is as a result of the daily swing.

    Past performance is not a guide to the future.

    Performance for the I USD Acc unit class in USD, launched on 27 April 2020. Source: Lipper. Performance is calculated on a Net Asset Value (NAV) to NAV basis and assumes all fund charges have been taken and that all income generated by the investments, after deduction of tax, remains in the fund. This fund has adopted a single swinging price, this means that on any given day the single dealing price will be set at either bid, offer or somewhere in between, based on whether there was a net inflow or outflow into or out of the Fund. The past performance depicted in this factsheet is based on that dealing price and therefore may appear more volatile than it would otherwise be if we were to show the notional bid or offer performance, this is as a result of the daily swing.

    Past performance is not a guide to the future.

    Performance for the Z GBP Acc unit class in GBP, launched on 13 December 2013. Source: Lipper. Performance is calculated on a Net Asset Value (NAV) to NAV basis and assumes all fund charges have been taken and that all income generated by the investments, after deduction of tax, remains in the fund. This fund has adopted a single swinging price, this means that on any given day the single dealing price will be set at either bid, offer or somewhere in between, based on whether there was a net inflow or outflow into or out of the Fund. The past performance depicted in this factsheet is based on that dealing price and therefore may appear more volatile than it would otherwise be if we were to show the notional bid or offer performance, this is as a result of the daily swing.

    Past performance is not a guide to the future.

    Performance for the Z GBP Dist unit class in GBP, launched on 16 December 2015. Source: Lipper. Performance is calculated on a Net Asset Value (NAV) to NAV basis and assumes all fund charges have been taken and that all income generated by the investments, after deduction of tax, remains in the fund. This fund has adopted a single swinging price, this means that on any given day the single dealing price will be set at either bid, offer or somewhere in between, based on whether there was a net inflow or outflow into or out of the Fund. The past performance depicted in this factsheet is based on that dealing price and therefore may appear more volatile than it would otherwise be if we were to show the notional bid or offer performance, this is as a result of the daily swing.

    Past performance is not a guide to the future.

    Portfolio

    As at 28 Feb 2021. All data source LGIM unless otherwise stated. Totals may not sum due to rounding.

    Currency (%)

    USD66.5
    GBP16.4
    EUR14.1

    This is the currency breakdown before allowing for any hedging the fund may use.

    Credit exposure (net %)

    Investment Grade-0.050.120.07
    High Yield-0.010.070.05
    EM Debt0.000.040.04
    Long Exposure
    Short Exposure
    Net Exposure

    Credit rating (%)

    AAA7.8
    AA7.5
    A20.3
    BBB41.7
    BB8.8
    B2.7
    CCC0.3
    D0.1
    NR2.0
    Other8.9

    Sector (%)

    Banks29.1
    ABS10.6
    Cash and Equivalents8.9
    Consumer Goods6.2
    Sovereign5.7
    Real Estate5.7
    Financial Services5.6
    Industrials4.4
    Utilities4.2
    Oil & Gas3.9
    Health Care3.9
    Consumer Services3.5
    Insurance3.3
    Covered2.7
    Other2.4
    Top 10 issuers20.2
    Rest of portfolio79.8
    No. of issuers798

    Top 10 issuers (%)

    Morgan Stanley2.5
    Credit Suisse Group AG2.4
    Citigroup Inc2.4
    Pacific Gas & Electric Company2.3
    Korea Development Bank2.1
    Boeing Company2.0
    Logicor 2019-1 UK Plc1.8
    Prudential Financial1.6
    Standard Chartered Plc1.6
    Toyota Motor Corporation1.5

    Country (%)

    United States38.3
    United Kingdom22.8
    Canada4.7
    Switzerland4.5
    France3.8
    Japan3.0
    Sweden2.5
    Korea2.3
    Germany2.2
    Other16.0

    Sustainability

    Sustainability disclosures

    The Sustainable Finance Disclosure Regulation (SFDR) is an EU regulation that came into force on 10 March 2021, and imposes disclosure requirements for EU financial products. These requirements include disclosing sustainability-related information for funds that (i) promote (among other characteristics) environmental or social characteristics (Article 8 products), or (ii) have a sustainable investment objective (Article 9 products), both as defined under SFDR.

    SFDR categorisation: Article 8Article 8: These funds promote environmental and/or social characteristics

    The Fund promotes a range of environmental and social characteristics as described below. These characteristics are met by:

    Stock selection
    Carbon intensity
    Future World Protection List
    Climate Impact Pledge
    Exclusions
    • Companies that derive 30% or more of their revenues (as a % of their balance sheet) from mining or extraction of thermal coal are excluded from the Fund.
    • Our coal exclusion list has been developed in conjunction with a third-party service provider and will apply to publicly listed, private and state-owned companies.
    • The list is reviewed twice a year and where new companies are identified, we will seek to divest holdings within the following 90 days.
    • Companies involved in controversial weapons are also excluded and UN Global Compact considerations are integrated into the investment process. These exclusions and considerations, however, did not form the rationale for the article 8 categorisation.
    Tilting
    ESG integration

    Our ESG integration encompasses both top-down and bottom-up approaches to identify and assess ESG factors in the research analysis process. The top-down research analysis identifies long-term, thematic shifts and structural changes which help determine the resiliency of sectors and the companies within them. The bottom-up analysis uses a proprietary, company analysis tool called Active ESG View which provides information on the ESG credentials of companies.

    • Our Active ESG View tool forms an essential component of this overall active research process. The tool brings together granular quantitative and qualitative inputs in order to reflect a full picture of the ESG risks and opportunities embedded within each company.
    • Active ESG View combines ESG raw data with qualitative assessment capturing ESG insights from our company analysis and engagements.
    • The ESG analysis starts with third-party data from multiple different vendors which includes hundreds of ESG metrics (including data on carbon emissions, water and waste, environmental policies and controls, labour, health and safety, bribery and corruption) spanning 64 specific sectors and/or sub-sectors from a number of ESG data providers.
    • Our Global Research and Engagement Groups (GREG), which is made up of Investment Stewardship and investment teams, have established a proprietary materiality matrix using such data which seeks to identify financially material topics for a given industry. The materiality matrix brings structure to our research and a framework to help systematically define and prioritise our engagement activity across the firm.
    • The GREGs review the ESG data within the Active ESG View tool for each sector in order to increase or decrease weightings for each environmental, social and/or governance factor within the tool with the aim to create an overall assessment.

    Active ESG View is an integral feature of this fund and the outputs of Active ESG View must be taken into account for all investment decisions.

    Active engagement is a vital pillar within our approach to ESG integration. In practice, the data alone may not tell the full story, which is why we believe that incorporating a qualitative element is essential in order to fully capture the ESG risks embedded within each company. Our qualitative inputs capture ESG insights leveraging on the extensive knowledge of our various research.

    A description of the extent to which the environmental and social characteristics are met will likely be made available as part of the annual report published in 2022 as required by SFDR. The Fund’s most recent annual report does not include any information pursuant to SFDR.

    Pre-contractual disclosure

    The Fund promotes a range of environmental and social characteristics. The Fund seeks to meet these characteristics by;

    (i) investing in bonds and bond related instruments issued by companies which meet the Investment Manager’s core pillars of ESG integration (as further described below); and

    (ii) excluding investments in bonds issued by companies that generate 30% or more of their revenues from mining and extraction of thermal coal. For the avoidance of doubt, the exclusion is at the corporate entity level only and will not include group or subsidiary companies; nor does it include metallurgical coal. A summary of the Investment Manager’s coal exclusion policy is available on request.

    Evaluating positive ESG factors is an integral part of the Fund’s investment process. The Investment Manager’s integrated framework for responsible investing across both public and private assets is primarily based on stewardship with impact and collaborative active research across asset classes. As part of the investment research process, material ESG factors are identified using both top-down and bottom-up approaches. The top-down research analysis performed by the Investment Manager’s sector experts, in conjunction with its investment stewardship teams; help determine the resiliency of sectors and the companies within them. ESG factors are also fully embedded into the bottom-up research process which involves evaluating the ESG credentials of companies that the Investment Manager considers for investment, alongside traditional financial metrics. The Investment Manager has developed a proprietary research tool called ESG Active View which brings together these granular quantitative and qualitative inputs by evaluating sector-specific ESG factors. The ESG Active View provides an overview of how companies manage potential, sector-specific ESG risks and opportunities, so that these can be considered alongside all other components of fundamental investment analysis.

    In addition to the above, active engagement with the issuers is used as a tool to drive progress and influence positive change and is conducted independently and in collaboration with industry peers and broader stakeholders. Engagement activities normally focus on specific material ESG issues and involve formulating an engagement strategy with regard to such issues with the aim to track and review the progress of the issuers during this process. The Investment Manager also provides regular reporting on the outcomes of its engagement. This can be made available on request or can be found at: www.lgim.com. Together, these activities enable the Investment Manager to conduct engagement that drives positive change and to deliver integrated investment solutions

    The Investment Manager finally aims to ensure that (where applicable) the issuers in which the Fund is invested follow good governance practices by 1) setting its expectations with issuers' management with regard to good governance practices; 2) actively engaging with the issuers; and 3) supporting policymakers and legislators to ensure there is strong regulation and standards.

    Governance practices

    The ways in which we ensure that investee companies follow good governance practices are set out below.

    Setting expectations

    A number of policies and processes guide the engagement activities, set out the approach to investment stewardship, and outline the expectations of investee issuers. The Global Corporate Governance and Responsible Investment Principles set out the approach and expectations with respect to key topics that are essential for an efficient governance framework, and for building a sustainable business model. We expect all issuers on a global scale to closely align with our principles which set out the fundamentals of corporate governance. We also take into account market specificities and take a tailored approach to voting on some topics in various markets. Further related policies can be found on the Investment Stewardship section of the LGIM website.

    Active engagement

    Active engagement with the issuers is used as a tool to drive progress and influence positive change and is conducted independently and in collaboration with industry peers and broader stakeholders. Engagement activities normally focus on specific material ESG issues and involve formulating an engagement strategy with regard to such issues with the aim to track and review the progress of the issuers during this process.

    Voting
    Supporting policymakers and legislators

    LGIM's Investment Stewardship team actively engages with policy makers and legislators to ensure there is strong regulation and standards in regards to governance practices.

    Fund Managers

    Colin is co-Head of Global Fixed Income and has responsibility for the London based fixed income team as well as overall portfolio management responsibilities for our Global Credit and Absolute Return strategies. Colin joined LGIM in 2005 from Henderson Global Investors where he was Head of Investment Grade Credit Fund Management. He has over 30 years’ experience in bond markets, specialising in non-government debt, and he has previously worked for Henderson Global Investors, Scottish Widows and Scottish Amicable.

    Matthew was appointed Head of Global Bond Strategies in September 2019. Prior to this he was co-head of the Euro credit portfolio management team, responsible for Euro-benchmarked and absolute return funds. He joined LGIM in March 2009 as a senior research analyst responsible for covering financial institutions and joined the Euro credit portfolio management team in February 2011. Prior to this Matthew spent three years as a Partner at Banquo Credit Management (a multibillion euro absolute return investment manager) and four years at UBS as Head of Financial Institutions Ratings Advisory. Matthew has more than 20 years’ experience in financial services and graduated from the University of York with a BA (hons) in English. He qualified as a chartered accountant with Coopers & Lybrand in 1996.

    ColinReedie

    MatthewRees

    Literature

    Trading information

    Prices

    Name
    I GBP Acc
    Mid price
    108.30p
    Change (%)
    -
    Currency
    GBP
    Price time
    16:00 CET
    Name
    I GBP Inc
    Mid price
    106.00p
    Change (%)
    -
    Currency
    GBP
    Price time
    16:00 CET
    Name
    I USD Acc
    Mid price
    119.88c
    Change (%)
    -
    Currency
    USD
    Price time
    16:00 CET
    Name
    Z GBP Acc
    Mid price
    116.92p
    Change (%)
    -
    Currency
    GBP
    Price time
    16:00 CET
    Name
    Z GBP Inc
    Mid price
    108.00p
    Change (%)
    -
    Currency
    GBP
    Price time
    16:00 CET

    Further details

    Costs

    Price basis
    Single swing
    Initial charge
    0.00%
    Ongoing charges figure
    0.56%
    Dilution adjustment
    0.358%- round trip
    Swing factor
    0.179%

    Codes

    ISIN
    LU1000844222
    SEDOL
    BK94358
    Bloomberg
    -
    MEX
    -

    Dealing information

    Valuation frequency
    Daily, 16:00 CET
    Dealing frequency
    Each Business Day
    Settlement period
    T+3
    Administrator/Custodian
    Northern Trust

    Country registration

    This share class is registered for sale in the following countries:

    For valuations and account queries contact:

    Legal & General (Unit Trust Managers) Limited
    PO Box 6080
    Wolverhampton
    WV1 9RB
    Tel : 0370 050 0955
    Email: [email protected]

    Legal & General ICAV
    LGIM Liquidity Funds Plc

    Northern Trust International Fund Administration Services (Ireland) Limited
    City East Plaza - Block A
    Towlerton
    Ballysimon Road
    Limerick
    Ireland
    V94 X2N9
    Fax: +353 1 434 5293
    Telephone: +353 1 434 5080
    Email: [email protected]

    Legal & General SICAV
    Northern Trust Global Services SE
    6 rue Lou Hemmer
    L-1748 Senningerberg
    Grand-Duché de Luxembourg
    Facsimile: +352 276 222 150
    Telephone: +352 276 222 514
    Email: [email protected]

    Key risks

    The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested.

    Past performance is no guarantee of future results.

    This fund holds bonds that are traded through agents, brokers or investment banks matching buyers and sellers. This makes the bonds less easy to buy and sell than investments traded on an exchange. In exceptional circumstances the fund may not be able to sell bonds and may defer withdrawals, or suspend dealing. The Directors can only delay paying out if it is in the interests of all investors and with the permission of the fund depositary.

    The fund invests directly or indirectly in bonds which are issued by companies or governments. If these companies or governments experience financial difficulty, they may be unable to pay back some or all of the interest, original investment or other payments that they owe. If this happens, the value of the fund may fall.

    Prices of the ABS/MBS may be volatile, and will generally fluctuate due to a variety of factors that are inherently difficult to predict. In addition, the terms of the ABS/MBS may restrict its sale in particular circumstances.

    The fund could lose money if any institution providing services such as acting as counterparty to derivatives or other instruments, becomes unwilling or unable to meet its obligations to the fund.

    Derivatives are highly sensitive to changes in the value of the asset on which they are based and can increase the size of losses and gains. The impact to the fund can be greater where derivatives are used in an extensive or complex way.

    Investment in contingent convertible debt securities may result in material losses to the portfolio based on certain trigger events. The existence of these trigger events creates a different type of risk from traditional bonds and may more likely result in a partial or total loss of value or alternatively they may be converted into shares of the issuing company which may also have suffered a loss in value.

    The fund may have underlying investments that are valued in currencies that are different from sterling (British pounds). Exchange rate fluctuations will impact the value of your investment. Currency hedging techniques may be applied to reduce this impact but may not entirely eliminate it.

    We may take some or all of the ongoing charges from the fund's capital rather than the fund's income. This increases the amount of income, but it reduces the growth potential and may lead to a fall in the value of the fund.

    Investment returns on bonds are sensitive to trends in interest rate movements. Such changes will affect the value of your investment.

    Important information

    This information is intended for investment professionals only and is for information purposes only. It should not be distributed without our permission.

    No investment decisions should be made without first reviewing the key investor information document and prospectus (and any supplements thereto) of the relevant product which includes information on certain risks associated with an investment.

    Unless otherwise agreed in writing, the Information on this website (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Any trading or investment decisions taken by you should be based on your own analysis and judgment (and/or that of your professional advisers) and not in reliance on us or the Information.

    This information is only directed at investors resident in jurisdictions where each fund is registered for sale. It is not an offer or invitation to persons outside of those jurisdictions. We reserve the right to reject any applications from outside of such jurisdictions.

    All information detailed on this website is current at the time of publication and may be changed in the future.

    Source and third party data

    Source: Unless otherwise indicated all data contained on this website is sourced from Legal & General Investment Management Limited.

    Where this document contains third party data ('Third Party Data’), we cannot guarantee the accuracy, completeness or reliability of such Third Party Data and accept no responsibility or liability whatsoever in respect of such Third Party Data

    Issuer

    Issued by Legal & General Investment Management Limited as promoter and distributor for this fund in the UK.

    Legal & General Investment Management Limited has been appointed as the discretionary investment manager for these Funds and is Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA, United Kingdom. Authorised and regulated by the Financial Conduct Authority, No. 119272.

    Index disclaimer

    Source ICE data indices, LLC (“ICE data”), is used with permission. ICE data, its affiliates and their respective third party suppliers disclaim any and all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither ICE data, its affiliates nor their respective third party suppliers shall be subject to any damages or liability with respect to the adequacy, accuracy, timeliness or completeness of the indices or the index data or any component thereof, and the indices and index data and all components thereof are provided on an “as is” basis and your use is at your own risk. ICE data, its affiliates and their respective third party suppliers do not sponsor, endorse, or recommend LGIM, or any of its products or services.

    Source ICE Data Indices, LLC (“ICE DATA”), is used with permission. ICE Data, its affiliates and their respective third party suppliers disclaim any and all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither ICE Data, its affiliates nor their respective third party suppliers shall be subject to any damages or liability with respect to the adequacy, accuracy, timeliness or completeness of the indices or the index data or any component thereof, and the indices and index data and all components thereof are provided on an “as is” basis and your use is at your own risk. Ice data, its affiliates and their respective third party suppliers do not sponsor, endorse, or recommend Legal & General Investment Management (Holdings) Limited or its affiliates, or any of their products or services.