European High Yield

Inception date Benchmark Total strategy assets Product literature
September 30, 1999 BAML European Currency Developed Markets HY Constrained Index* €213.4M (As of October 2017)

NA

  • Highlights
  • Performance

Objective**

The strategy seeks to achieve above-average total return by investing primarily in high-yielding, non-investment-grade debt obligations issued by European corporations.

Product highlights

We believe outperformance is driven by:

  • Pursuing capital appreciation in credits with improving fundamentals
  • Skeptically investing in deteriorating or stagnant credits based on rigorous scenario analysis
  • Actively managing the top-down portfolio profile based on market outlook
  • Selecting issuers driven by bottom-up fundamental credit analysis
  • Adhering consistently to a risk-controlled process

 

We see multiple opportunities to pursue strong performance:

  • Wide range of issuers of various size, complexity, and geography
  • Capital structure complexity: senior, subordinate, and secured bonds as well as loans, convertibles, hybrids and preferred, and equity securities
  • Dislocations between cash instruments and derivatives
  • Varied security types including bullet maturities, floating rate notes, call/put option structures, covered bonds, etc.
  • Tracking error will typically range between 2.0% and 3.0%
  • Typical duration range of +/- 1 year 

 

Investment team

Assets may include accounts that are not reflected in the composite.

**No assurance can be given that the investment objective will be achieved or that an investor will receive a return of all or part of his or her initial investment. Actual results could be materially different from the stated goals. Investors should carefully consider the risks involved before deciding to invest. See the product profile for a summary of risk considerations. As with any investment, there is a potential for profit as well as the possibility of loss.

Tracking error targets are based on a number of assumptions and are subject to revision and may change materially with changes in underlying assumptions. While the investment manager considers tracking error in the investment process, the strategy's composition and performance may vary substantially from that of the target. Achieved tracking error is the result of many factors, including market conditions and there can be no assurance that the tracking error actually reflected in client portfolios will be at levels indicated in the investment objectives.