Trustnet Alpha Managers Ian Spreadbury and Ian Fishwick, who run a range of bond funds for Fidelity, will manage the money for SIG, which says the single UK mandate is one of its largest ever and will help underpin its Skandia Corporate Bond (Signature) fund.
Explaining the change in manager, SIG's head of fixed income Adam Smears said Fidelity is a higher conviction manager than Royal London, and has demonstrated greater risk adjusted returns over a full investment cycle.
"Furthermore, their strategy is more liquid, in keeping with a core corporate bond portfolio. Their risk management techniques have proved to be very effective in the bear market of 2007/08 and the subsequent recovery in 2009," he added.
Performance of funds vs IMA Strategic Bond sector over 3-yrs
Source: Financial Express Analytics
Financial Express data backs up SIG's view. Looking at the two funds which are managed by Spreadbury and sit in the IMA Sterling Strategic Bond sector, both return more than the sector average over three years, while taking on relatively low risk.
Performance of funds vs sector over 3-yrs
Source: Financial Express Analytics
The same is true of the funds run by Fishwick, who usually manages institutional mandates. Three of the funds he runs are in the UT Sterling Corporate Bond sector; Fidelity Institutional UK Aggregate Bond, UK Corporate Bond and UK Long Corporate Bond.
All three have outperformed their sector in the three years to 30 September, although the UK Long Corporate Bond fund was more volatile than the sector average.
"Fidelity is naturally extremely pleased to have been appointed by Skandia Investment Group to manage this Corporate Bond mandate," Gary Shaughnessy, UK managing director at Fidelity said.
"We have invested in our fixed income capability for many years and we look forward to using the team's experience and skill to the benefit of Skandia's clients," he added.