Active from 12 August, the BlackRock Global European High Yield Bond Fund will seek high total returns via a combined capital growth and income-generating approach.
Utilising a flexible credit-buying strategy across multiple European markets, no less than 70% of the portfolio will consist of below BBB- graded bonds, in line with BlackRock’s view that high-yielding opportunities are less susceptible to interest rate rises.
Benchmarked against the Barclays European High Yield 3% Issuer Constrained Index, the NYSE-listed fund is managed by Michael Phelps, BlackRock’s head of European fundamental credit, who is assisted by senior European credit portfolio manager Jose Aguilar.
Phelps cited a dearth of yield across the bonds spectrum coupled with impending interest rate hikes and European economic growth as the driving factors behind the decision to launch the fund.
He said: “The world’s major central banks are following very different policy paths and despite some recent – largely localised – yield spikes, yields remain close to historically low levels, forcing income-hungry investors to look beyond traditional sources of fixed income such as investment grade and sovereign bond markets.
“Furthermore, a resurging European economy is supporting credit quality and creating a flow of compelling high yield opportunities, while default rates have been trending lower and are expected to remain low.”
The fund is the third offering available through the BGF range, sitting alongside the Global High Yield Bond Fund and the US High Yield Bond Fund.
