search menu Home > Sanlam Investments > Our fund range FIXED INCOME Sanlam Hybrid Capital Bond Fund Aiming to generate 5% income per annum (net of all fees). The fund will invest in the subordinated debt of large, household names. The Funds aims to generate 5% income per annum, net of all fees from a Hybrid capital portfolio with medium volatility. The fund: Adopts a bottom-up approach investing in high quality issuers, lower down in the capital structure in order to achieve higher returns and enhanced yield Embraces a contrarian but conservative approach to investing Uses no derivatives, equities, leverage or structured products Sections: 5 reasons to invest Philosophy The 4 pillars ESG Investment process Fund commentary Related articles Fund literature Factsheet KIIDs Regulatory Fund information Awards and ratings Meet the Sanlam Fixed Interest Team Peter Doherty Head of Fixed Income View profile Guillaume Desqueyroux Fund Manager View profile Darren Reece Fund Manager View profile Why invest in the fund? 5 reasons to invest Fund philosophy The 4 pillars ESG Investment process Hybrid Capital is a differentiated asset class that sits between senior debt and equity – as such, it can offer returns with lower correlation to equities and fixed interest Hybrid Capital could make much better use of your risk budget than high yield or long duration We are investing in the subordinated debt of household names where the parent is investment grade, i.e. high quality companies Sanlam’s position as a recognised expert in hybrid capital means that we have good access to the primary (new issues) market Transparency and scalability - No leverage, derivatives, structured products or equities We can invest across the capital structure thereby picking the best risk/reward from Tier 1,2,3 and Preferred stock. Peter Doherty, Fund Manager Fund Commentary Monthly Commentary Quarterly Update October 2021 Whilst Global Equity and Bond markets did not make large net moves in October, there was meaningful intra-month volatility which spooked credit markets a little. As a result, the Hybrid Capital Bond Fund had a negative return of -0.8%. On balance this move is a welcome one. We have been facing lower and lower yields for more than a year as sentiment remained positive and liquidity readily available. This modest correction offers the opportunity to reinvest interest income and Legacy paper principal at somewhat higher yields. We expect the Legacy theme to play out more actively in the rest of Q4 as we come nearer the Jan 2022 effective date for Capital Requirements Regulation CRR2 in European Banks. Explore the details Aiming to generate 5% income per annum (net of all fees). The fund will invest in the subordinated debt of large, household names. Read the latest factsheet Related articles VIDEO 04 November 2021 What makes Hybrid Capital unique? Peter Doherty, Head of Fixed Income at Sanlam Investments talks about what makes Hybrid Capital unique and how it’s used to balance diversification and risk. INSIGHTS 02 September 2021 Sanlam Credit Fund Five-Year Anniversary We are delighted to celebrate the fifth-year anniversary of the Sanlam Credit Fund, launched on the 31st August 2016, managed by Peter Doherty, Guillaume Desqueyroux and Darren Reece. INSIGHTS 02 September 2021 Sanlam Hybrid Capital Bond Fund Five-Year Anniversary Since launch five years ago, the Sanlam Hybrid Capital Bond Fund has delivered a total return of 42.1%, placing it at the top of the Investment Association’s (IA) Strategic Bond sector over the period. Read all Fund Risks Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years’ performance is available in the fund factsheets. The fund will invest in debt securities. The government or company issuer of a bond might not be able to repay either the interest or the original loan amount and therefore default on the debt. This would affect the credit rating of the bond and, in turn, the value of the fund. Investment in bonds and other debt instruments (including related derivatives) is subject to interest rate risk. If long-term interest rates rise, the value of your shares is likely to fall. The yield is gross and could be higher than what you will receive in the future. The Fund may engage in transactions in financial derivative instruments for hedging purposes. There is a risk that losses could be made on derivative positions or that the counterparties could fail to complete on transactions. The Fund may invest in Contingent Convertible Securities (CoCos). The value of CoCos is unpredictable and will be influenced by many factors including, without limitation (i) the creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; (ii) supply and demand for the CoCos; (iii) general market conditions and available liquidity and (iv) economic, financial and political events that affect the issuer, its particular market or the financial markets in general. The investor may not receive a return of principal if expected on a call date or indeed at any date. Ready to invest? 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This will help us improve our service and tailor the marketing you see on apps and other websites. Select 'Accept all' to agree or 'Manage consents' to chose which cookies we use. Accept all Manage consents The value of investments and any income from them can fall and you may get back less than you invested.