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 WKN A14UB3

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

2.94%
$857.1m

1YR Return
(View Total Returns)

Manager Tenure

-2.05%
5yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.16
2.61%

Inception Date 04-Jun-2015

Performance figures calculated in USD

Other Literature

30-Sep-2020 - Michael Della Vedova, Portfolio Manager ,
Over the medium term, we believe continued monetary and fiscal stimulus could create significant support to the high yield market. Looking further out, we expect a diverse allocation to global high yield markets to provide strong risk-adjusted performance. Along with our rigorous fundamental research process, we believe this flexible approach will be crucial in the months ahead as different policy responses to the coronavirus play out.
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 % -2.05% 2.94% 6.55% 4.85% -4.45%
Indicative Benchmark % 2.91% 4.17% 6.98% 5.43% 0.02%
Excess Return % -4.96% -1.23% -0.43% -0.58% -4.47%

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-Sep-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -2.05% 2.94% 6.55% 4.85%
Indicative Benchmark % 2.91% 4.17% 6.98% 5.43%
Excess Return % -4.96% -1.23% -0.43% -0.58%

Inception Date 04-Jun-2015

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

Data as of  30-Sep-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 23-Oct-2020 Quarter to DateData as of 23-Oct-2020 Year to DateData as of 23-Oct-2020 1 MonthData as of 30-Sep-2020 3 MonthsData as of 30-Sep-2020
Fund % 2.64% 2.64% -1.93% -2.05% 2.88%
Indicative Benchmark % 1.39% 1.39% 1.41% -1.00% 4.11%
Excess Return % 1.25% 1.25% -3.34% -1.05% -1.23%

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-Sep-2020 - Michael Della Vedova, Portfolio Manager ,
High yield bonds across the globe recorded losses in September. Weakness in equity markets, gridlock in Washington over another round of stimulus, and the runup to the U.S. presidential election fostered broad risk aversion. In Europe, fears that a second wave of coronavirus infections could derail a nascent economic recovery and worries about a post-Brexit deal eroded initial gains. Emerging markets corporate bonds experienced weakness as global volatility increased. Within the portfolio, credit selection in the gaming and lodging and airlines segments contributed to relative performance. Security selection in manufacturing and information technology was also supportive. Conversely, credit selection in the cable operators, financials, and energy industries worked against us. Security selection in utilities also weighed on relative results, as did our underweight in the aerospace and defense segment.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 13.56% Was (31-Aug-2020) 14.61%
Other View Top 10 Issuers

Monthly data as of 30-Sep-2020

Holdings

Total
Holdings
279
Largest Holding Victoria 1.30% Was (30-Jun-2020) 0.80%
Top 10 Holdings 9.62%
Other View Full Holdings Quarterly data as of 30-Sep-2020

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating BB/B Rated BB Rated
By % 16.34% -36.78%
Fund 16.34% 24.03%
Indicative Benchmark 0.00% 60.81%

Average Credit Quality

B+

Monthly Data as of 30-Sep-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 7-10 Years 1-3 Years
By % 12.28% -12.08%
Fund 28.73% 8.95%
Indicative Benchmark 16.45% 21.03%

Weighted Average Maturity

6.33 Years

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

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration Cash Holdings 1-3 Years
By % 5.33% -6.30%
Fund 5.33% 27.63%
Indicative Benchmark 0.00% 33.93%

Weighted Average Duration

3.86 Years

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

Industry

Total
Industries
30
Largest Industry Energy 12.20% Was (31-Aug-2020) 10.62%
Other View complete Industry Diversification

Monthly Data as of 30-Sep-2020

Indicative Benchmark: ICE BofAML Global High Yield Index

Largest Overweight

Cable Operators
By6.85%
Fund 10.15%
Indicative Benchmark 3.30%

Largest Underweight

Other Telecommunications
By-2.59%
Fund 1.55%
Indicative Benchmark 4.14%

Monthly Data as of 30-Sep-2020

30-Sep-2020 - Michael 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 also have an overweight position in several key defensive sectors, such as food, which should hold up relatively well, even in a more difficult macroeconomic backdrop.

Countries

Total
Countries
30
Largest Country United States 52.12% Was (31-Aug-2020) 54.60%
Other View complete Country Diversification

Monthly Data as of 30-Sep-2020

Indicative Benchmark: ICE BofAML Global High Yield Index

Largest Overweight

Netherlands
By2.39%
Fund 3.63%
Indicative Benchmark 1.23%

Largest Underweight

Italy
By-3.19%
Fund 0.78%
Indicative Benchmark 3.97%

Monthly Data as of 30-Sep-2020

30-Sep-2020 - Michael Della Vedova, Portfolio Manager ,
We have modestly reduced our emerging markets position and will look to add some high yield exposure in developed markets. We expect to continue this pivot in positioning, with a preference for European high yield over the U.S. Heading into the U.S. Presidential election, we believe Europe can provide more fiscal stimulus with less political volatility.

Currency

Total
Currencies
8
Largest Currency U.S. dollar 99.77% Was (31-Aug-2020) 99.60%
Other View complete Currency Diversification

Monthly Data as of 30-Sep-2020

Indicative Benchmark : ICE BofAML Global High Yield Index

Largest Overweight

U.S. dollar
By 20.01%
Fund 99.77%
Indicative Benchmark 79.77%

Largest Underweight

euro
By -17.77%
Fund 0.16%
Indicative Benchmark 17.93%

Monthly Data as of 30-Sep-2020

30-Sep-2020 - Michael 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 01-Oct-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
    11
  • Years investment
    experience
    27
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 1999, 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
    15
  • Years investment
    experience
    21
Samy Muaddi, CFA

Samy Muaddi is a portfolio manager in the International Fixed Income Division. He is the lead manager of the Emerging Markets Corporate Bond and Asia Credit Bond Strategies and co-manages the Emerging Markets Bond and Global High Income Bond Strategies. Samy also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Samy’s investment experience began in 2006 when he joined T. Rowe Price, beginning as an associate analyst in the Fixed Income Division. After that, he was a credit analyst and then an associate portfolio manager on the Emerging Markets team before assuming his current role.

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

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
Gregor T. Dannacher, CFA

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

Gregor’s investment experience began in 1992, and he has been with T. Rowe Price since 2015, beginning in the Fixed Income Division. Prior to T. Rowe Price, Gregor was employed by Guggenheim Global Trading, a division of Guggenheim Partners, as a portfolio manager and senior analyst, managing a global credit opportunity hedge fund portfolio. Before that, he was a director of investment research at Kamunting Street Capital Management, a global credit hedge fund. He also has held various other investment roles in his career, including as a senior lead equity research analyst and leverage finance analyst.

Gregor 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, Stern School of Business. Gregor also has earned the Chartered Financial Analyst® designation.

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

  • 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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