A guide to the Kames
High Yield Bond Fund
For professional investors only
Six reasons to choose the Kames
High Yield Bond Fund
1. Multi award-winning performance.
Our high yield team has won a steady stream of
awards for its performance. The Fund also has
a silver rating from Morningstar OBSR. Visit our
website at www.kamescapital.com/awards for
more information on our awards.
2. Monthly income is available.
We understand that income flexibility is important.
So we offer the option to take a monthly income
from this Fund.
3. Stable management for eight years.
Fund manager Philip Milburn has managed the Fund
since November 2003, and was joined by Melanie
Mitchell in 2009. Philip and Melanie are supported
by the knowledge and expertise of our 19 other fixed
income professionals, whose industry experience
averages 16 years. Philip and Melanie have jointly
managed the fund since 1 September 2011.
4. Stock selection is our focus.
Around 80% of our Fund’s outperformance comes
from stock selection.
5. We back our convictions.
The Fund is concentrated, giving each holding
the opportunity to contribute meaningfully to
performance. We aim to fully exploit market
inefficiencies for investors’ benefit.
6. The Fund invests globally.
How we invest
Our fixed income specialists are guided
in their research and fund management
duties by a three-pronged philosophy.
1. Markets are inefficient. We can exploit this through
robust research and active management.
2. It is vital to identify, analyse and manage risk.
3. Investment strategies should be transparent and
Our investment approach at a glance
Process
• For this Fund, bottom-up stock selection drives the significant majority of performance.
• However, our approach also includes the top-down analysis of credit spreads and our
macroeconomic outlook.
• Our proprietary Quadrant Analysis Framework ensures consistency and rigour in our
research covering fundamentals, valuations, sentiment and technical factors.
• Our entire team contributes to our strategy and research, challenging each others’ views
to craft a strategy that is supported by the entire team.
• Fund managers are responsible for ensuring only appropriate risks are taken, within an
independent oversight framework.
People
• Our fund managers are individually accountable for their decisions.
• We combine the role of fund manager and analyst to ensure practical decision-making.
• We have specialists in government bonds, investment grade bonds, high yield,
emerging market debt and ABS, based across Europe and the US, giving the Fund an
international perspective with local stock-picking abilities.
• These specialists come from diverse backgrounds, providing differing views and
perspectives, and a more rounded approach to decision-making.
Style
• This Fund can benefit from various sources of outperformance, including: stock
selection; asset allocation; rating selection; sector selection, and interest rate
management.
• We run concentrated portfolios – our fund managers back their convictions with
meaningful positions in their best ideas.
The people behind the Fund
Your Fund’s co-managers
The co-managers of the Kames High Yield Bond Fund, Philip Milburn and Melanie Mitchell,
have almost 40 years’ experience between them.
Philip Milburn
Fund Manager
Philip joined us in 1997. He started his career in UK
equities, and had a brief secondment to Latin American
equities before joining the Fixed Income team. He
brings equity discipline to high yield analysis, and uses
his strong background in economics for macro fund
positioning.
Melanie Mitchell
Fund Manager
7
We take a team approach to investing
Investors in our fixed income funds benefit from the strength and depth of our 21-strong,
award-winning team in the UK. The team produces expert analysis of government bonds,
investment grade and high yield bonds, ABS and tactical asset allocation.
With an average of 16 years’ industry experience, the team offers great experience,
stability and consistency. Some of the key members of our team are shown below.
Investment policy The primary investment objective is to maximise total return (income plus capital) by investing in a portfolio of predominantly high yield bonds, selected investment grade bonds and cash. The Fund may hold sterling and other currency denominated bonds hedged back to sterling. The Fund may also invest in deposits, money market instruments, derivative instruments and forward transactions.
Performance target The Fund’s performance objective is to be in the upper second quartile of the IMA £ High Yield Bond sector over a rolling 12-month period, and in the top quartile over a rolling 36-month period.
Legal structure The Fund is a sub-fund of Kames Capital ICVC, an open-ended investment company.
Launch date 1 March 2002
Currency Non-UK currency exposure is predominantly hedged back into sterling.
Pricing Daily
Domicile UK
OBSR rating AA
Please note that we are changing the annual management charge (AMC) for this fund from 1 March 2012. The AMC for the A class of shares will rise from 1.0% to 1.25% and the B class will rise from 0.5% to 0.75%.
SEDOL codes
A (Acc) 3142523
A (Inc) 3142512
B (Acc) 3142556
B (Inc) B1N9DY5
FT MexID
A (Acc) SEOPAA
A (Inc) SEOPAI
B (Acc) SEOPBA
B (Inc) SEOPBI
We’re proud of our Fund’s track record. But don’t
take our word for it. See for yourself at:
www.kamescapital.com/highyieldbond
Silver Morningstar OBSR
Analyst Rating™
Rayner Spencer Mills rated
Lipper Fund Awards 2012
and 2011
Portfolio Adviser Awards
2012
Fund Manager of the Year
Award 2012 and 2011
2012 Morningstar OBSR Five
Year Award
Awards and rating
Our track record
9
Key fund facts
We believe it’s vital to do what we say we’ll do for our clients,
consistently and transparently. We pride ourselves on being
one of the best managers at keeping advisers and our investors
up to date with developments that affect their investments.
Get in touch to find out more about our High Yield Bond Fund.
T: 0870 609 0101 or International: 0044 870 609 0101
E: [email protected]
Contact us
Steve Kenny
Head of Retail Sales
M: +44 (0)7740 897 917
This document is not intended for retail distribution and is directed only at investment professionals. It should not be distributed to, or relied upon by, private investors. The information in this document is based on our understanding of the current and historical positions of the markets. The views expressed should not be interpreted as recommendations or advice.
Risk Factors
The value of investments and the income from them may fall as well as rise and cannot be guaranteed. This Fund is a medium to long-term investment. Fluctuations in interest rates and exchange rates may affect the capital value of the Fund. Past performance is not a guide to future performance. The value of investments may fall as well as rise, and investors may not receive back the amount invested. Any investment objective, performance benchmark and yield information will be treated as a target only and should not be considered as an assurance or guarantee of the performance of the Fund or any part of it. The impact of the initial charge will be to reduce the amount available for investment. All annual charges are deducted capital.
Investors in the Fund should consider the following risk factors;
Market Risk: The potential for change in market value of instruments due to adverse movements in equity, bond, commodity, currency and other market prices, indices or interest rates or changes in the anticipated or calculated volatility of these movements.
Liquidity Risk: This includes both market liquidity risk and funding risk. Market liquidity risk is the inability to trade an instrument at the desired price due to a lack of supply or market demand. Funding risk is where a fund has insufficient cash to meets its financial obligations.
Counterparty Risk: The risk that the failure of a counterparty to meet its obligations leads to a financial loss to the Fund, both through loss of any monies owed to the Fund by the counterparty and the cost of reinstating economic exposure in the case of counterparty default.
Concentration Risk: The risk of a portfolio being too concentrated in particular positions or too exposed to certain issuers. Highly concentrated positions can exacerbate market, liquidity and counterparty risk.
To improve our customer service, and for training purposes, your telephone conversations with us may be recorded. You should read the Key Investor Information and Application Form document carefully, particularly the section on Risk Factors. The Key Investor Information and Full Prospectus are available on our website www.kamescapital.com or by calling our investor helpdesk on 0800 45 44 22 or in writing from Kames Capital, Mellon House, Ingrave Road, Brentwood, CM15 8TG.
The Kames High Yield Bond Fund is a sub-fund of the Kames Capital ICVC, an Open Ended Investment company. Kames Capital plc is the Authorised Corporate Director of the Company.
Kames Capital is an AEGON Asset Management company and includes Kames Capital plc (Company Number SC113505) and Kames Capital Management Limited (Company Number SC212159). Both are registered in Scotland and have their registered office at Kames House, 3 Lochside Crescent, Edinburgh, EH12 9SA. Kames Capital plc is authorised and regulated by the Financial Services Authority (FSA reference no: 144267). Kames Capital plc provides segregated and retail funds and is the Authorised Corporate Director of Kames Capital ICVC, an Open Ended Investment Company. Kames Capital Management Limited provides investment management services to AEGON, which provides pooled funds, life and pension contracts. Kames Capital Management Limited is an appointed representative of Scottish Equitable plc (Company Number SC144517), an AEGON company, whose registered office is 1 Lochside Crescent, Edinburgh Park, Edinburgh, EH12 9SE (FSA reference no: 165548).
