With a cumulative total return of 14.8 percent since its launch five years ago, Schroder ISF Global High Yield is celebrating its anniversary while ranking well within the top quartile of its peer universe.
Schroders Head of Fixed Income Karl Dasher said, "We believe Schroder ISF Global High Yield is an attractive investment vehicle for investors to gain exposure to the high yield sector while still maintaining a high level of liquidity. We have a large global platform but yet a local presence in the key markets for high yield (the US, Europe, and Asia). We have 25 credit analysts, three quantitative analysts, and a dozen credit portfolio managers around the world who contribute to the management of the fund. We use a research-driven, bottom up approach to portfolio construction, yet we focus intensely on risk management."
With at least 70 percent of the Fund’s net assets invested in securities with a credit rating below investment grade, Schroder ISF Global High Yield aims to provide a return of capital growth and income via a portfolio of bonds and other fixed and floating rate securities. These securities are issued primarily by corporate issuers worldwide and are denominated in various currencies.
"While the default rate will probably continue to rise rather substantially over the next 12-15 months, we believe that credit spreads have already discounted a high default rate and very low recovery rates on defaulted bonds. Hence, we believe that the absolute best buying opportunity in the entire economic cycle will occur before year-end, and a rally in high yield bonds will precede a sustainable rally in stocks. While we have a negative outlook for economic growth and credit fundamentals in 2009, we would caution that this is precisely when investors should examine their respective strategies for adding high yield bond exposure over time, during any further waves of spread widening in coming months," said Wesley Sparks, Manager of Schroder ISF Global High Yield.
Sparks added they will maintain the Fund’s conservative position in the meantime and try to use volatility to their advantage.
Schroders, an independent international asset management and private banking group, utilises over 350 portfolio managers and analysts through its 37 offices in 28 countries. With more than 200 years experience in financial services, Schroders manages investments across all major asset classes for clients including large pension funds, government bodies, charities, corporations and individual investors.
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