Strategy
Investment Approach
- Integrates fundamental research and holistic capital structure considerations with a focus on global diversification targeting high yield companies from North American and European regions plus issuers located in emerging markets countries.
- 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 we expect to continue.
- Invests primarily in global issuers rated below investment-grade and focuses on:
- Proprietary fundamental analysis that drives independent credit and conviction ratings.
- Global diversification of high yield corporate issuers.
- 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 175 issuers across the globe with the flexibility to take meaningful over- and underweights to countries, regions, industries, ratings and individual credits.
- 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%
- Single country exposure maximum of 15% excluding the U.S.
- Sovereign debt up to 10%
- Investment-grade corporates up to 15%
- Bank loans up to 20%
- Neutralize currency risk by hedging back into the base currency
Past performance does not predict future returns.