Smith & Williamson
Short-Dated Corporate Bond Fund 31 August 2011 Fund aim The investment objective of the Fund is to achieve income returns greater than the UK Base Rate. The Fund will invest the majority of its Net Asset Value in a variety of Sterling, US Dollar and Euro short-dated investment grade corporate bonds of no more than 6 years maturity. The Fund may invest up to a maximum of 30% of its Net Assets in government, agency or Supranational bonds and short-dated Gilts. Manager profile Ian Kenny joined Smith & Williamson in 1997. As a member of the Fixed Interest team, Ian has fund management responsibilities on the Smith & Williamson Fixed Interest Trust and is fund manager for the Smith & Williamson Short-Dated Corporate Bond Fund. Ian is a Chartered Certified Accountant and a CFA Charterholder. Date appointed to fund 29 April 2009 Chris Lynas heads up the Fixed Interest team. Chris has been the fund manager for the Smith & Williamson Fixed Interest Trust since 1998. Chris also has responsibility for the Smith & Williamson Short-Dated Corporate Bond Fund alongside
Manager commentary August was an eventful month for bond markets. Government bonds were up sharply in the first half and then fell sharply at the month end, finally finishing ahead of where they started. Corporate bond prices did not keep pace with the strong gilt market leading to spread widening. There were also further concerns over peripheral Europe with waning hopes that a credible solution might be reached soon. Other economic indicators gave weaker signals and the MPC again voted for no change on short term rates. The debate on whether the slowdown is mid-cycle or double-dip remained unresolved with conflicting data supporting both side of this argument.
1 2 3 4 5 6 7 8 9 10
Utilities Government Beverages Oil & Gas Mining Telecom Food Retail Pharmaceuticals Diversified Operations Tobacco
Instrument Holdings % in any one corporate issuer Maturity £ corporate bonds $ or € corporate bonds Minimum benchmark size £ supranational bonds Gilts Cash
Range 50-75 ≤ 5% ≤6 years 30-100% 0-50% ≥ £150 m 0-20% 0-10% 0-100%
Current portfolio 60 ≤ 2% (1 bond per issuer) 4.0 years (weighted average maturity) 49.9% 37.7% (hedged back to Sterling) Per issue 0.0% 10.1% 2.3%
Performance*
Fund 3 month Libor 10.6% 10.1% 7.6% 7.5% 6.1% 6.1% 6.0% 5.9% 4.6% 3.1%
During the month there was a large amount of activity in the Fund with some top up purchases in corporate bonds and a couple of switches in the gilt holdings to improve the blended yield.
Fund tramlines for investment
Ian Kenny. Date appointed to fund 29 April 2009 Top 10 sectors
In the US political stalemate over the "debt ceiling" was resolved with some loss of credibility for the US and Standard & Poors also downgraded US Treasuries one notch to AA+.
Cumulative 3 months 1.5% 0.2%
6 months 3.1% 0.4%
1 year 1.4% 0.8%
Since Inception 11.4% 2.0%
Indexed performance since inception*
*Mid to mid, net income reinvested at ex dividend dates to 31 August 2011. Source: Morningstar Direct. Data does not include initial charges. Note: Investments carry risks. Past performance is not a guide to the future. Investors may not get back the amount invested. Please read the risk warning.
Distribution history
30 September 2010 31 December 2010 31 March 2011 30 June 2011
Asset allocation Retail* 0.9799p 0.9261p 0.9215p 0.9247p
Institutional* 1.0556p 1.0034p 0.9947p 0.9994p
Credit rating breakdown
Maturity breakdown
*(gross amount per share)
Further information 020 7131 8100 (Broker desk) Tel:
[email protected] Email: Web: www.sandwfunds.com Dealing desk: Smith & Williamson Investment Funds Plc c/o BNP Paribas Fund Services Dublin Limited Tel: 00 353 1 612 6476 Fax: 00 353 1 512 5362 Fund prices: Smith & Williamson Financial Times The Fund qualifies for ISA investment Investment advisor:
Smith & Williamson Investment Management Limited
Issued by Smith & Williamson Investment Management Limited 25 Moorgate London EC2R 6AY Authorised and regulated by the Financial Services Authority
Fund facts Share classes# Fund size (Retail & Institutional) No of holdings Unit price Underlying yield*
Retail £220.85 million 60 105.00p 3.7%
Institutional
Gross redemption yield**
1.5%
1.8%
Modified duration*** Launch date Launch price Unit type Dealing Minimum investment Initial Subsequent Charges Initial AMC Reference codes ISIN SEDOL Bloomberg Ex dividend dates Interim Final Fund status
3.5 years 29 April 2009 100.00p Income 5pm each Irish Business Day
103.40p 4.1%
14 August 2009 100.00p
£1,000 £500
£250,000 £500
5% 1.00% (charged to income)
N/A 0.65% (charged to income)
IE00B3VFH812 B3VFH81 SWSDCBD
IE00B43RH379 B43RH37 SWSDCBB
31 March/ 30 June/ 30 September 31 December Irish Open-Ended Investment Company UCITS sub-fund. Authorised by the Irish Financial Regulator and recognised by the UK Financial Services Authority (FSA).
# Institutional euro and dollar share classes are also available. Please contact Smith & Williamson Investment Management for more information. * The Underlying yield reflects the annualised income net of expenses of the Fund as a percentage of the mid-market unit price of the Fund as at the date shown. It is based on a snapshot of the portfolio on that day. It does not include any preliminary charge and investors may be subject to tax on distributions. This yield figure is unaudited. ** The Gross redemption yield is a forecast of the total return on the Fund taking account of expected income receipts and capital charges if all holdings are held to redemption. This yield figure is unaudited. *** Modified duration is a measure of risk for fixed interest securities as it predicts the sensitivity of the value of the Fund’s portfolio to change in interest rates. The higher the value the greater the volatility of the Fund’s performance resulting from changes to interest rates.
Risk Warning The value of investments can go down as well as up and investors may not receive back the original amount invested. The Fund will invest substantially in short-dated corporate bonds. Bond funds may not behave like direct investments in the underlying bonds themselves. By investing in bond funds the certainty of a fixed income for a fixed period with a fixed return of capital are lost. The Fund will be exposed to credit risk on parties with whom it trades and may also bear the risk of settlement default. Investments in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems. Exchange rate changes may cause the value of underlying overseas investments to go down as well as up. Investments in higher yielding bonds issued by borrowers with a lower credit rating may result in a greater risk of default and have an adverse effect on income and capital value. Past performance is not a guide to future performance. Please read the Risk Section of the Fund’s Simplified Prospectus for a fuller description of the risks prior to investing. Important Information: This document contains sources of information believed to be reliable but no guarantee, warranty or representation, express or implied, is given as to their accuracy or completeness. This is neither an offer nor a solicitation to buy or sell any investment referred to in this document. Smith & Williamson Investment Management Limited and its affiliates and/or their officers, directors and employees may own or have positions in any investment mentioned herein or any investment related thereto and may trade in any such investment. Smith & Williamson Investment Management Limited acts as adviser to Smith & Williamson Investment Management (Ireland) Limited. S&W documents may contain future statements which are based on our current opinions, expectations and projections. S&W undertakes no obligation to update or revise any future statements. Actual results could differ materially from those anticipated. Shareholders in the UK shall not have the right to cancel the investment agreement constituted by the acceptance by or on behalf of the Company of an application for Shares. In addition, most if not all of the protections provided by the United Kingdom regulatory system will not apply to investments in the Company. The right of Shareholders may not be protected by the investors’ compensation scheme in the United Kingdom. Investment is subject to documentation (Prospectus, Simplified Prospectus and Terms & Conditions), copies of which can be obtained free of charge in English at www.sandwfunds.com
