The unconstrained SWIP European High Yield Fund will carry on the eight-year working relationship of co-managers Steve Logan, head of European high yield, and Lesley O’Neill, investment director for European high yield.
It will be a European-centric best ideas fund of around 75 stocks, that also uses the research and ideas generated by SWIP’s high yield team of eight that includes its New York-based US high yield team.
Logan, said: “We believe the European High Yield asset class will, over the long term, continue to demonstrate strong growth driven by issuers’ desire to secure long-term capital away from the banking sector. For investors, the high yield asset class offers the prospect of a strong risk-adjusted return and a high level of income that is diversified from equities and other fixed income segments.
"As stock pickers, we believe the high yield market currently offers investors a number of exciting opportunities. A recession in Europe is already priced into the asset class and the high quality end of the market looks fundamentally cheap."
Commenting on the securities held, O’Neill, commented: "Given the current low yield environment, high yield bonds as an asset class compare favourably to government bonds and look more attractively priced than investment-grade credit and equities. We will continue to exploit high quality names with strong business models and resilient cash flows and see long term value in high yield issuers such as, HeidelbergCement, Iron Mountain and Dutch cable company, Ziggo."
