The content on this page and any materials about the Senior Secured Loan product are targeted to experienced investors who have sufficient investment knowledge to understand the product and underlying risks.
About this trust
Aims to provide a high level of income with a potential for capital appreciation from investing in non-investment grade corporate debt instruments. The company will predominantly invest in Senior Secured Loans, together with Junior Loans and High Yield Bonds. The company has the ability to use borrowing to gear the portfolio to up to 20% of net assets where appropriate.
Total fund size:£88,002,192
(as at 31/10/2015)
Benchmark:Credit Suisse Leveraged Loan Index
The value of investments and the income from them can go down and up, and you may not get back as much as you paid in. Past performance is not a guide to the future.
For further risks associated with this trust please refer to the 'Key risks' section below.
You should remember that past performance is not a guide to the future. Source: J.P. Morgan Asset Management. Total return, net of charges and any applicable fees using cum income Net Asset Values (NAVs) debt at par with net dividend (if any) reinvested, in sterling. For detail see the Trust’s latest Report & Accounts.
Short term tactical gearing up to 20 per cent. of Net Asset Value (NAV)
Management fee of 75bps on lower of NAV and market capitalisation
Buyback powers of 14.99 per cent up to 50 per cent. redemption offer if discount
exceeds 5 per cent on average over a 3 month period to financial year end on 31
January each year
Continuation vote at an AGM to be held in 2017 and every 3rd AGM thereafter
No performance fee
Shares in this investment fund are not subject to the Financial Conduct Authority's (FCA) restrictions for marketing Non-mainstream Pooled Investment products and can be marketed to retail investors directly or via Independent Financial Advisers.
The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because the company would qualify as an investment trust if the company was based in the UK.
For information on charges relating to this trust please check the Trust factsheet.
What are some of the risks?
Exchange rate changes may cause the value of underlying overseas investments to go down as well as up.
This trust may invest in non investment grade bonds which increases the capital risk and have an adverse effect on the performance of funds which invest in them.
For income funds/shares - Dividend income is not guaranteed and will fluctuate.
This fund may use derivatives for investment purposes or for efficient portfolio management.
External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds could decline at the same time.
This trust may utlilise gearing (borrowing) which will exaggerate market movements both up and down.
Investment objective is to provide a high level of income with a secondary objective
of capital appreciation
Diversified portfolio of mainly secured loans, together with junior loans and high
yield bonds, including stressed debt of mainly US and Canadian companies
Target dividend of 5 pence in first financial period ending 31 January 2015
Floating rate coupons can benefit investors in a rising rate
environment and can help to mitigate inflation risk
The targets and aims provided above are the Investment Manager's targets and aims
only and are not necessarily part of the Fund's investment objectives and policies
as stated in the prospectus. There is no guarantee that these will be achieved.
When the interest coupon (or interest payment) is based on a reference rate, such
as the London Interbank Offered Rate ('LIBOR'), plus a fixed spread. For example
LIBOR + 2.50%. Floating rate coupons typically reset every three months so the interest
coupon fluctuates based on changes in short-term interest rates. Generally, when
interest rates go up (down) the reference rate (and in turn the interest coupon)
will go up (down) and the value of the principal (the amount borrowed and due to
be returned to the lender) remains constant in the absence of deteriorating credit
What are secured loans?
Secured loans are loans generally made to non-investment grade borrowers. They are
typically senior instruments, secured by a substantial proportion of the borrower's
assets, and rank ahead of junior loans and unsecured debt in the corporate capital
Debt that ranks behind (or is 'subordinate' to) other forms of debt in a company's
capital structure in the event of liquidation or bankruptcy, but ranks higher than
common equity or preferred equity.
Equity that ranks higher to common equity in a company's capital structure in the
event of liquidation or bankruptcy and (generally) in the payment of dividends,
but ranks lower than other forms of debt.
Equity in a company attributable to common (or ordinary) shareholders. Ranks behind
debt and preferred equity in a company's capital structure in the event of liquidation
Secured loans are typically structured, arranged and administered by one or several
commercial or investment banks.
They are then sold to other banks or institutional investors such as the Company
who invest in them for their unique attributes.
Companies issue loans to supplement capital structure or to refinance existing debt
Source: J.P. Morgan. For illustrative purposes only.