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Introducing the Global High Income Bond Strategy

Michael Della Vedova, Global High Yield Portfolio Manager

The scope of the investable universe that we’re focusing on is one that is truly global. For context, a decade ago, when people spoke of ‘high yield’, they were really thinking of US-based high yield. In the past decade, the investable universe has more than doubled and that hasn’t been driven by the US market. It’s largely been driven by the quadrupling in size of the European high yield market, and the significant increases we’ve seen in the emerging high yield corporate debt issuance as well. This is because companies are thinking more globally. Their needs for capital have increased on a global basis. They’re not just thinking of individual markets. And how they use their capital structure is increasing.

The investment objective of the strategy is to really seek to generate income for our clients. We do this by looking at bonds that deliver significant income through their coupon, but in addition to that, utilising our deep analytical resources, we’re looking for inefficiencies that can lead to capital appreciation as well.

We’re benchmark aware but we’re not reliant on the benchmark. Instead, we’re very reliant on our own in house bottom up research, and that can lead to us having significant underweights or overweights to that benchmark for the benefit of our clients. We’re looking to generate returns from a strategy of highest conviction ideas, where it’s more concentrated in names.  And finally, all investments are hedged back to US dollars. The idea there is so that we can really isolate the credit returns we are able to generate for our clients.

We believe that high yield is as relevant to asset allocators’ decision making now as it’s ever been. The income that the asset class is able to generate is increasingly important in a low interest rate environment.


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202008-1300544

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