Royal London Corporate Bond Class Z - Income (GBP)

While the fund is more adventurous than peers, and is often more volatile too, it has typically lost as much value as peers during market falls and outperformed them a little as markets rise.

Therefore investors who've been prepared to ride out the dips have been rewarded with excellent long-term performance. Past performance is not a guide to future returns though.

The managers search for bonds that other investors have misunderstood. Often they'll be perceived as too risky. But with some extra analysis the Royal London team can often be confident there are sufficient rewards on offer for the risks being taken. They typically take a long-term view, with the aim to exploit inefficiencies and find undervalued opportunities. They're prepared to look far and wide to find these opportunities.

We think the team's edge comes from carrying out detailed research into 'low profile' parts of the market. These under-researched bonds may be unrated (the issuing company has not sought a formal assessment of credit quality from a credit ratings agency), complex and often secured against a company's assets. This provides the opportunity to add value on a case-by-case basis, although the lack of a credit rating adds liquidity risk. The fund typically holds unrated and secured bonds and has a focus on A and BBB-rated bonds, which sit at the lower end of the investment grade corporate bond spectrum, although the fund also invests in some higher-risk high-yield bonds. The fund aims to be well diversified.

Please note that charges are taken from capital, which could boost the income, but reduces potential for capital growth.