e-fundresearch: Mr Adam Cordery, you are the fund manager of the Schroder ISF Corporate Bond (ISIN: LU0113257694). Since when are your responsible for the fund management?
Cordery: July 2006.
e-fundresearch: Which benchmark do you adhere to?
Cordery: Merrill Lynch EMU Corporate Bond Index.
e-fundresearch: Are you also responsible for other funds at the moment?
Cordery: Schroders Corporate Bond Fund
Schroders Monthly High Income Fund
All Maturities Corporate Bond Fund
Long Dated Corporate Bond Fund
e-fundresearch: What is the total volume that you manage in all your funds?
Cordery: EUR 4.5 billion as at the end of June 2009.
e-fundresearch: Regarding the performance: which performance did you achieve since the beginning of the year and in the years 2003-2008? Absolutely and relatively to the relevant benchmark?
Cordery:
e-fundresearch: How content are you with your own performance in the last years and this year?
Cordery: We are very pleased with the performance over the past year.
e-fundresearch: How are you able to deliver added value for your investors with your performance?
Cordery: We have been able to deliver performance by focusing on:
- Positioning the fund underweight credit markets in 2007 when credit spreads had blew out and overweight credit markets when credit spreads began their rally from Q4 of 2008 after Lehman Brothers Holdings Inc defaulted. This positioning of the fund successfully helped us navigate credit markets during a difficult market environment realising in benchmark beating performance
- Company fundamentals and ensuring that we invest in companies we are confident will survive a strong recession which helped us avoid the large blow-ups such as Lehman Brothers, Washington Mutual, the Icelandic Banks, CDOs, SIVs, etc.
e-fundresearch: How long have you been a fund manager already?
Cordery: 13 years in the investment industry.
e-fundresearch: What were your biggest successes and your biggest disappointments in your career as fund manager?
Cordery: I always wish I had bought lower and sold higher.
e-fundresearch: What kind of capital market situation do we have at the moment? How do you act in this environment?
Cordery: It feels crazy, but these supposedly exceptional events seem to have happened very frequently in my career.
This crisis, like all others, is all about leverage, and the leverage bubble is constantly shifting. In 1998, it was sovereigns that were over-levered. In 2000 it was industrials that were over-levered. Today it is the banks.
Who will over-extend themselves next? My guess is it will be sovereigns again – watch out investors in government bonds!
e-fundresearch: What are the special challenges in this environment?
Cordery: The two biggest challenges in this environment are:
- Avoiding defaults / downgrades in the portfolio
- Managing a corporate bond fund during a period where governments are realising record deficits
e-fundresearch: What objectives do you have till the end of the year and in the mid term for the upcoming 3 to 5 years?
Cordery: The main objective is to continue to deliver top quartile performance to our clients
e-fundresearch: Do you model yourself on someone? Any ideals?
Cordery: I try just to be me. It is too hard to try and be someone else.
e-fundresearch: What motivates you in your job?
Cordery: Ultimately, my family. Day-to-day, beating targets (whether it is a peer group or a benchmark), talking to clients about what I do and seeing that result in new business.
e-fundresearch: What else do you want to achieve or do you have any further aims as a fund manager?
Cordery: I like my job. So long as I am free to manage money in a sensible way, I will be happy doing this for the rest of my career.
e-fundresearch: What other profession would you have taken interest in, apart from becoming a fund manager?
Cordery: Before being a fund manager, I spent time as a lecturer, I worked for the UK government in airline regulation and I was an economist. Although none of these roles ever felt quite right for the long term, they have all been great experience for what I do today.
