SKANDIA GLOBAL FUNDS PLC - Fidelity Investments

Skandia Global Funds plc
Interim Report and Unaudited Financial Statements for the period ended 30 June 2012
SKANDIA INVESTMENT GRADE CORPORATE BOND FUND
INVESTMENT ADVISER’S REPORT FOR THE PERIOD ENDED 30 June 2012
Skandia Investment Grade Corporate Bond Fund – Wellington Management Company, LLP
Below is a report from the Investment Adviser of the Skandia Investment Grade Corporate Bond Fund for the first six months of
2012.
The Skandia Investment Grade Corporate Bond Fund was launched on 19 March 2010 with a starting Net Asset Value per share
of USD 10.00.
Investment Adviser’s Commentary
The Skandia Investment Grade Corporate Bond Fund outperformed its primary benchmark, the Barclays Capital Global Aggregate
Credit Corporate Bond Index. The Fund recorded a total net return of +6.63%, while the benchmark index had a total return of
+4.90% for the period.*
The Fund’s underweight to the government sector and security selection within corporate bonds were the biggest contributors to
returns during the first quarter. Within investment grade financials, the allocation to banking and security selection within
insurance companies generated positive results during the quarter. Within industrials, issuer selection in consumer noncyclicals
and capital goods generated the majority of excess returns. Gains were partially offset by overweight positions within basic
industry. The portfolio’s underweight duration bias in the US added value as yields rose over the quarter due to improving
economic data, while yield curve positioning detracted. These gains were partially offset by overweight positions in German
interest rates relative to rates in Italy and Spain.
The Fund ended the second quarter with a marginal gain, but modestly lagged the benchmark during a very challenging period for
financial markets. Interest rate management and sector allocation benefited performance in May despite the strong market
volatility, but security selection detracted amid the very difficult trading conditions. In June, amid an improved trading
environment, corporate security selection was the biggest positive for performance.
*Performance figures refer to A share class and are sourced from Factset. Calculation basis: bid to bid, net of fees, gross income
reinvested in Sterling terms.
References to benchmarks are for illustrative purposes only and are not intended to imply a performance objective. There is no
guarantee that the Skandia Investment Grade Corporate Bond Fund will outperform this benchmark.
Source: Wellington Management Company LLP, Inc., as at 29th June 2012.
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