July 16, 2012 / 3:08 PM / 5 years ago

TEXT-Fitch affirms Royal London Cash Plus Fund rating

July 16 - Fitch Ratings has affirmed the Royal London Cash Plus Fund's
Credit Rating at 'AAA' and Fund Volatility Rating at 'V1'. The fund is advised
by Royal London Asset Management (RLAM), and is a sub-fund of the UK domiciled
OEIC, Royal London Bond Funds ICVC.

KEY RATING DRIVERS:

The affirmation of the fund's Credit Ratings reflects the distribution of 
ratings, the credit quality, and the relatively short-term maturity of the 
portfolio. The rating also recognises the investment advisor's capabilities and 
resources. The affirmation of the volatility rating reflects the low sensitivity
to market risk factors such as interest rate and spread risks.

ASSET CREDIT QUALITY:

The fund is concentrated in securities rated in the 'A' category, which makes up
43% of the fund's portfolio, as of 11 July 2012. The fund also maintains 34% of 
portfolio holdings in the 'AAA' category. The modified duration of the fund is 
0.40 years, indicating the average short-term nature of the portfolio. The 
credit quality of the fund's portfolio of assets, combined with the short 
maturity of assets, is consistent with a 'AAA' bond fund Credit Rating. The 
proportion of deposits subject to a Negative Outlook or Rating Watch Negative is
low. The fund is currently invested in 19 obligors, as of 11 July 2012. 

PORTFOLIO SENSITIVITY TO MARKET RISKS:

The fund has a moderately low exposure to market risk factors such as interest 
rate and spread risks. As of the 11 July 2012, the fund's weighted average 
maturity was 177 days and the weighted average life was 481 days. Interest rate 
risk is managed with a duration limited to three years.

THE ADVISOR:

RLAM was established in 1988 and is part of the Royal London Group, a mutual 
society. Royal London is the UK's largest mutual life and pensions company. As 
of end June 2012, RLAM managed a total of around GBP44bn in assets, of which 
around 45% is within fixed income and 15% within cash products.

FUND PROFILE:

The fund invests in a mixture of cash, certificates of deposits and floating 
rate and fixed bonds (including sovereign bonds and covered bonds). Investments 
are placed with institutions with a minimum 'A-' rating, within countries with a
'AAA' rating. Supranational investments are permitted, and all sovereign 
investments will be made with 'AAA' rated countries. As of 11 July 2012, the 
fund's total assets stood at GBP85m.

Fitch notes that there is investor concentration within the fund, as the fund 
has only been in existence for a year. RLAM maintain close dialogue with fund 
investors to mitigate potential redemption risk.

RATING SENSITIVITY:

The ratings may be sensitive to material changes in the credit quality or market
risk profiles of the fund. In particular, Fitch notes that the fund's current 
credit rating is particularly sensitive to potential credit deterioration in the
portfolio of assets. A material adverse deviation from Fitch guidelines for any 
key rating driver could cause the ratings to be lowered by Fitch.Additional information is available at 'www.fitchratings.com'. 

The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.

The sources of information used to assess this rating were the public domain and
RLAM.

Applicable criteria 'Global Bond Fund Rating Criteria', dated 16 August 2011, is
available at www.fitchratings.com.

Applicable Criteria and

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