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SICAV

Global High Income Bond Fund

A concentrated, high-income portfolio of primarily global high yield corporate bond opportunities supported by stringent risk management.

ISIN LU1216622644 Bloomberg TRPGHII:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

1.30%
$382.5m

1YR Return
(View Total Returns)

Manager Tenure

-6.27%
4yrs

Information Ratio
(3 Years)

Tracking Error
(3 Years)

-0.15
3.10%

Inception Date 04-Jun-2015

Performance figures calculated in USD

Other Literature

30-Apr-2020 - Mike Della Vedova, Portfolio Manager ,
Over the long-term, we expect a diverse allocation to global high yield markets to provide strong risk-adjusted performance. Default rates are likely to increase as the economic fallout of the coronavirus continues to unfold. However, the high yield asset class has become a higher-quality market over the past few years, and the impact of fallen angels—those bonds being downgraded to high yield—is likely to drive this trend further.
Michael Della Vedova
Michael Della Vedova, Co-Portfolio Manager

Mike Della Vedova is a global high yield portfolio manager in the Fixed Income Division. He is a portfolio manager for the Europe High Yield Bond Strategy and co-portfolio manager for the Global High Yield Bond Fund and Global High Income Bond Strategy. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

 

Strategy

Investment Objective

To maximise the value of its shares through both growth in the value of, and income from, its investments. The fund invests mainly in a diversified portfolio of high yield corporate bonds from issuers around the world, including emerging markets.

Investment Approach

  • Integrates fundamental research and holistic capital structure analysis while focusing on global diversification targeting high yield companies from North American, European and emerging markets regions.
  • Represents the natural evolution of T. Rowe Price’s core high yield credit competency and recognizes the global growth of the high yield market that is expected to continue.
  • Invests primarily in global issuers rated below investment-grade and focuses on:
    • Proprietary fundamental analysis drives independent credit and conviction ratings.
    • Credits with long-term potential for balance sheet and external rating improvements.
    • Strict risk management practices.
  • Utilizes active management in the high yield market where credit selection is critical.

Portfolio Construction

  • High-conviction, concentrated approach targeting approximately 125-150 credit issuers across the globe with the flexibility to take meaningful over- and underweight
  • Incorporates a truly global corporate composition using a top-down overlay based on relative and absolute valuation characteristics across regions, countries, credit qualities and industries to complement core bottom-up position selections targeting the following regional allocations:
    • U.S. high yield: range of 30%-70%
    • European high yield: range of 10% to 50%
    • Emerging markets: range of 0% to 40%
  • Neutralize currency risk by hedging back into the base currency

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Fund % -6.27% 1.30% N/A 3.45% -12.32%
Indicative Benchmark % -4.41% 1.76% N/A 3.74% -9.60%
Excess Return % -1.86% -0.46% N/A -0.29% -2.72%

Inception Date 04-Jun-2015

Manager Inception Date 31-Dec-2019

Indicative Benchmark: ICE BofAML Global High Yield Index Hedged to USD

Data as of  30-Apr-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -11.20% -0.54% N/A 2.03%
Indicative Benchmark % -7.34% 0.66% N/A 2.85%
Excess Return % -3.86% -1.20% N/A -0.82%

Inception Date 04-Jun-2015

Indicative Benchmark: ICE BofAML Global High Yield Index Hedged to USD

Data as of  31-Mar-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 27-May-2020 Quarter to DateData as of 27-May-2020 Year to DateData as of 27-May-2020 1 MonthData as of 30-Apr-2020 3 MonthsData as of 30-Apr-2020
Fund % 3.05% 10.44% -9.65% 7.17% -12.78%
Indicative Benchmark % 4.12% 8.86% -5.88% 4.55% -9.95%
Excess Return % -1.07% 1.58% -3.77% 2.62% -2.83%

Inception Date 04-Jun-2015

Indicative Benchmark: ICE BofAML Global High Yield Index Hedged to USD

Indicative Benchmark: ICE BofAML Global High Yield Index Hedged to USD

Performance figures calculated in USD

Past performance is not a reliable indicator of future performance.  Source for fund performance: T. Rowe Price. Fund performance is calculated using the official NAV with dividends reinvested, if any. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. It will be affected by changes in the exchange rate between the base currency of the fund and the subscription currency, if different. Sales charges (up to a maximum of 5% for the A Class), taxes and other locally applied costs have not been deducted and if applicable, they will reduce the performance figures. 

Where the base currency of the fund differs from the share class currency, exchange rate movements may affect returns.

30-Apr-2020 - Mike Della Vedova, Portfolio Manager ,
High yield bonds across the globe posted solid gains in April. Unprecedented fiscal and monetary support from global governments and central banks in response to the economic fallout of the coronavirus pandemic supported market sentiment. Recently downgraded issuers significantly increased the size of the market and drove buying activity. The U.S. Federal Reserve’s decision to begin purchasing eligible fallen angels and high yield exchange-traded funds was also supportive. European high yield and emerging markets corporates outperformed the U.S. as some of the regions hardest hit by the coronavirus such as Italy, France, and Spain showed signs of improvement and began to ease lockdown measures. Central banks in numerous developing countries cut interest rates to help stimulate their economies. Within the portfolio, credit selection in the energy and financials segments aided relative performance. Conversely, our reserves allocation, which is necessary for the portfolio’s liquidity, as well as security selection in the entertainment and leisure space weighed on relative results.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 14.45% Was (31-Mar-2020) 15.82%
Other View Top 10 Issuers

Monthly data as of 30-Apr-2020

Holdings

Total
Holdings
236
Largest Holding Calpine 1.60% Was (31-Dec-2019) 0.49%
Top 10 Holdings 11.97%
Other View Full Holdings Quarterly data as of 31-Mar-2020

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating BB/B Rated BB Rated
By % 13.78% -34.46%
Fund 13.78% 22.89%
Indicative Benchmark 0.00% 57.35%

Average Credit Quality

B+

Monthly Data as of 30-Apr-2020
Indicative Benchmark:  ICE BofAML Global High Yield Index

Sources for Credit Quality Diversification: Moody's Investors Service and Standard & Poor's (S&P) split ratings (i.e. BB/B and B/CCC) are assigned when the Moody's and S&P ratings differ. Short-Term holdings are not rated.

Maturity View maturity analysis

  Largest Overweight Largest Underweight
Maturity Cash Equivalents 1-3 Years
By % 8.49% -9.67%
Fund 8.49% 11.14%
Indicative Benchmark 0.00% 20.81%

Weighted Average Maturity

6.02 Years

Monthly Data as of 30-Apr-2020
Indicative Benchmark:  ICE BofAML Global High Yield Index

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration Cash Holdings 1-3 Years
By % 7.95% -8.00%
Fund 7.95% 23.80%
Indicative Benchmark 0.00% 31.81%

Weighted Average Duration

3.91 Years

Monthly Data as of 30-Apr-2020
Indicative Benchmark:  ICE BofAML Global High Yield Index

Industry

Total
Industries
31
Largest Industry Financial 10.78% Was (31-Mar-2020) 13.01%
Other View complete Industry Diversification

Monthly Data as of 30-Apr-2020

Indicative Benchmark: ICE BofAML Global High Yield Index

Largest Overweight

Cable Operators
By6.40%
Fund 10.30%
Indicative Benchmark 3.90%

Largest Underweight

Energy
By-6.44%
Fund 6.20%
Indicative Benchmark 12.64%

Monthly Data as of 30-Apr-2020

30-Apr-2020 - Mike Della Vedova, Portfolio Manager ,
We are overweight cable operators, as we believe these issuers generally exhibit more defensive characteristics given their subscription-based, recurring-revenue, business model. We are also overweight several key defensive sectors, such as food, which should hold up relatively well, even in a more difficult macroeconomic backdrop.

Countries

Total
Countries
27
Largest Country United States 49.38% Was (31-Mar-2020) 48.76%
Other View complete Country Diversification

Monthly Data as of 30-Apr-2020

Indicative Benchmark: ICE BofAML Global High Yield Index

Largest Overweight

Brazil
By2.03%
Fund 6.46%
Indicative Benchmark 4.43%

Largest Underweight

United States
By-4.23%
Fund 49.38%
Indicative Benchmark 53.62%

Monthly Data as of 30-Apr-2020

30-Apr-2020 - Mike Della Vedova, Portfolio Manager ,
We have modestly reduced our exposure in emerging markets and will look to add some high yield exposure in developed markets. While certain emerging markets segments outperformed in the first quarter of 2020, we expect strong fiscal and monetary stimulus to begin feeding through to developed markets going into the second quarter.

Currency

Total
Currencies
3
Largest Currency U.S. dollar 99.68% Was (31-Mar-2020) 99.60%
Other View complete Currency Diversification

Monthly Data as of 30-Apr-2020

Indicative Benchmark : ICE BofAML Global High Yield Index

Largest Overweight

U.S. dollar
By 18.78%
Fund 99.68%
Indicative Benchmark 80.90%

Largest Underweight

euro
By -16.53%
Fund 0.27%
Indicative Benchmark 16.79%

Monthly Data as of 30-Apr-2020

30-Apr-2020 - Mike Della Vedova, Portfolio Manager ,
We do not expect to add value via currency management; we typically hedge our non-U.S. dollar exposure back to U.S. dollars in order to limit volatility, keeping the focus on credit selection.

Team (As of 21-May-2020)

Michael Della Vedova

Mike Della Vedova is a global high yield portfolio manager in the Fixed Income Division. He is a portfolio manager for the Europe High Yield Bond Strategy and co-portfolio manager for the Global High Yield Bond Fund and Global High Income Bond Strategy. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mike’s investment experience began in 1994, and he has been with T. Rowe Price since 2009, beginning in the Fixed Income department. Prior to this, Mike was cofounder and partner of Four Quarter Capital, a credit hedge fund focusing on below investment-grade European corporate debt. Mike also was employed by Muzinich & Company as a senior analyst and assistant portfolio manager in London.

Mike earned an LL.B. and a B.Com. in finance from the University of New South Wales and a Graduate Diploma in Legal Practice (GDLP) from the University of Technology, Sydney. He also was admitted as a solicitor to the Supreme Court of New South Wales.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    10
  • Years investment
    experience
    26
Michael Connelly, CFA

Michael Connelly is a portfolio manager in the Fixed Income Division, co-managing the Global High Income Bond Strategy  . He also contributes to the U.S. Core, U.S. Core Plus, and Global Multi-Sector Bond Strategies. He is a cochairman of the Investment Advisory Committee for the Global High Income Bond Fund and a member of the Sector Strategy Advisory Group. Michael is a vice president of T. Rowe Price Associates, Inc., and T. Rowe Price Group, Inc.

Michael’s investment experience began in 2000, and he has been with T. Rowe Price since 2005, beginning in the Fixed Income Division as a high yield credit analyst. After that, he became an associate portfolio manager. Prior to this, Michael was an equity research analyst for Robert W. Baird & Co., Inc., in Milwaukee, Wisconsin.

Michael earned a B.B.A. in finance and marketing from Marquette University and an M.S. in finance from the University of Wisconsin, Madison. Michael also has earned the Chartered Financial Analyst® designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Fund manager
    since
    2020
  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    14
Samy Muaddi

Samy Muaddi is a portfolio manager in the Fixed Income Division of T. Rowe Price. Mr. Muaddi is the lead manager and executive vice president of the Emerging Markets Corporate Bond Strategy and chairman of the strategy's Investment Advisory Committee. He also manages the Asia Credit Strategy and is co-portfolio manager of the Global High Income Strategy. Mr. Muaddi is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Mr. Muaddi has 13 years of investment experience, all of which have been with T. Rowe Price. He joined the firm in 2006.

Mr. Muaddi earned a B.A., summa cum laude, in economics from the University of Maryland. He also has earned the Chartered Financial Analyst designation. Mr. Muaddi is an adjunct professor at Georgetown University in the Walsh Graduate School of Foreign Service.

  • Fund manager
    since
    2020
  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    14
Gregor T. Dannacher, CFA

Gregor Dannacher is a global corporate credit portfolio specialist in the Fixed Income Division of T. Rowe Price. He supports the Global High Income, Global High Yield, U.S. High Yield, Global Loan, Credit Opportunities, and U.S. Investment-Grade Strategies, working closely with clients, prospects, and consultants. Mr. Dannacher is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Mr. Dannacher has 27 years of investment experience, four of which have been with T. Rowe Price. Prior to joining the firm in 2015, he was a portfolio manager and senior analyst at Guggenheim Global Trading, a division of Guggenheim Partners. Prior to that, Mr. Dannacher was director of investment research and a senior analyst at Kamunting Street Capital Management. He also worked at CIBC World Markets as a senior equity research analyst.

Mr. Dannacher earned a B.S. in accounting from Villanova University and an M.B.A., with honors, in finance and international business from New York University, Leonard N. Stern School of Business. He also has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    5
  • Years investment
    experience
    28

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (USD) Minimum Subsequent Investment (USD) Minimum Redemption Amount (USD) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $1,000 $100 $100 5.00% 115 basis points 1.32%
Class I $2,500,000 $100,000 $0 0.00% 60 basis points 0.70%
Class Q $1,000 $100 $100 0.00% 60 basis points 0.77%
Class Sd $10,000,000 $0 $0 0.00% 0 basis points 0.10%

Please note that the Ongoing Charges figure is inclusive of the Investment Management Fee and is charged per annum.

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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

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