Global High Income Bond: How we work
The leadership team of the GHI strategy, since inception, has always had more than one portfolio manager. The world’s a big place, and to manage a truly global high yield strategy we believe in having leadership representation in each of the core regions.
We use a globally based fundamental research platform to support the strategy. We have analysts dedicated to looking at corporate credit based in all the key regions of the world. We also, and most importantly, have a true belief in collaboration. It’s not just looking at sub-investment grade companies. We have collaboration between high yield analysts, investment grade, emerging markets and—even more critically when looking at this part of the capital structure—our equity colleagues.
We get a different perspective working with our equity colleagues. We’re able to look at true valuations for the entire enterprise, rather than just one small part focusing on the debt. It effectively allows you to use a wide-angle lens when looking at an opportunity rather than a microscope.
Idea generation is a critical aspect of the Global High Income strategy. It’s part of a process that’s been tried and tested here at T. Rowe Price when looking at high yield for over 30 years. No one individual is the gatekeeper of where those ideas come from. In some cases they can come from the analysts doing their bottom up work on the individual companies. Other times it may come from a relative value idea generated by our dedicated traders. In addition to that, at some stages, we may take a more top down approach as we build a balanced strategy, so the idea generation may come from myself or the other co-portfolio managers.
We believe that high yield is as relevant to asset allocators’ decision making now as it’s ever been. The income that the asset class is able to generate is increasingly important in a low interest rate environment.
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