Benchmarked against the BoAML European Currency High index, the fund has the flexibility to invest across the high-yield credit spectrum, identifying “strong horse” companies that can carry their debt load though economic cycles.
The strategy the fund is using has been offered to investors outside of the UK since 2012, and has delivered a 9.3% annualised return since inception against the BoAML European Currency High index.
“We believe that European high-yield bonds have earned a place in an investor’s tactical allocation, offering an attractive portfolio diversification opportunity marked by high risk-adjusted yields, and low default rates,” said Rosenthal.
“Geopolitical risk, generally full valuations, and the expectation for a large new issue calendar in the autumn have the potential to create volatility which we can use to our advantage.
“We remain constructive on credit fundamentals. Monetary policy and its effect on the structure of interest rates will continue to be a major focus. While the lack of inflation is a headwind for monetary tightening, we believe that both the Fed and ECB are poised to begin removing stimulus, and that interest rates will gradually move higher.
“At this time we manage our portfolios with a duration shorter than the market overall.”