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Strategy

Investment Objective

To maximise the value of its shares through both growth in the value of, and income from, its investments. The fund invests mainly in a diversified portfolio of high yield corporate bonds that are denominated in European currencies.

Investment Approach

  • The fund focuses primarily on European currency-denominated corporate debt issued by below investment-grade companies.
  • Invests mainly in BB and B rated bonds, with the ability to purchase lower-quality securities when compelling valuation and risk/reward opportunities arise.
  • The fund integrates fundamental proprietary research at the corporate bond, sovereign, and equity levels. This integral collaboration provides a holistic view of a company’s capital structure and management team, as well as its position in the larger market environment unique to each country.
  • Research focuses on quantitative and qualitative factors that drive an independent credit rating. Analysts look to identify long-term potential for balance sheet and external rating improvements while adhering to strict risk management practices.
  • Target excess-return will be primarily driven by individual security selection and, secondarily, by relative sector and credit quality allocations.

Past performance is not a reliable indicator of future performance.

Annualised Performance

Current Year Performance

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31-May-2025 - Mike Della Vedova, Portfolio Manager

European high-yield bonds delivered positive returns in euro terms in May. Credit spreads tightened over the month amid signs of easing trade tensions between the U.S. and China. Within the portfolio, our security selection contributed given the broadly improved risk environment, led by our holdings in the services, wirelines, capital goods and transportation sectors. This included exposures to a payment processing firm, a British telecommunications company as well as a food machinery manufacturer and a UK-based courier company. By contrast, our holdings in the cable/satellite television and retail sectors detracted. Our industry allocation detracted modestly, with our allocation to cash, which is necessary for portfolio liquidity, hindering the most in the spread tightening environment. Our respective overweight and underweight allocations to services and chemicals also had a small negative relative impact. Our underweight to the utility sector was supportive, however.

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GIPS® Information

T. Rowe Price (“TRP”) claims compliance with the Global Investment Performance Standards (GIPS®).

A complete list and description of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

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