SICAV
European High Yield Bond Fund
Research-driven, targeting consistent high income.
3YR Return Annualised
(View Total Returns)
Total Assets
(EUR)
1YR Return
(View Total Returns)
Manager Tenure
Information Ratio
(5 Years)
Tracking Error
(5 Years)
Inception Date 11-Feb-2014
Performance figures calculated in EUR
Strategy
The ECB's highly accommodative monetary policy stance and announcement of new measures in December provide a strong fundamental support for European corporate markets, including high yield, at least indirectly. The European Union's coronavirus rescue package is also beneficial and should help to support the economic recovery in the region. With respect to the coronavirus, while the start of the vaccine rollout is encouraging, near-term significant challenges remain in keeping the virus under control as highlighted by several European countries tightening restrictions and announcing new lockdowns during December.
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Against this backdrop, we believe individual security selection will continue to be increasingly important. After significant spread tightening, valuations are not as attractive as they were. We anticipate greater dispersion going forward with the possibility of lower-quality names and less well-known credit stories outperforming.
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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 that are denominated in European currencies.Investment Approach
- The fund focuses primarily on European currency-denominated corporate debt issued by below investment-grade companies.
- Invests mainly in BB and B rated bonds, with the ability to purchase lower-quality securities when compelling valuation and risk/reward opportunities arise.
- The fund integrates fundamental proprietary research at the corporate bond, sovereign, and equity levels. This integral collaboration provides a holistic view of a company’s capital structure and management team, as well as its position in the larger market environment unique to each country.
- Research focuses on quantitative and qualitative factors that drive an independent credit rating. Analysts look to identify long-term potential for balance sheet and external rating improvements while adhering to strict risk management practices.
- Target excess-return will be primarily driven by individual security selection and, secondarily, by relative sector and credit quality allocations.
Portfolio Construction
- At least 80% of assets will be invested in securities denominated in European currencies—mainly the euro and the pound.
- Currency exposure is fully hedged back to the euro.
- Up to 20% of assets may be invested outside of European currencies, including U.S. dollar high yield and investment-grade corporate bonds.
- Target tracking error: 200–400 basis points
Performance (Class Q)
Annualised Performance
| 1 YR | 3 YR Annualised |
5 YR Annualised |
Since Inception Annualised |
|
|---|---|---|---|---|
| Fund % | 4.14% | 2.61% | 4.45% | 4.50% |
| Indicative Benchmark % | 3.18% | 3.36% | 5.50% | 4.43% |
| Excess Return % | 0.96% | -0.75% | -1.05% | 0.07% |
| 1 YR | 3 YR Annualised |
5 YR Annualised |
Since Inception Annualised |
|
|---|---|---|---|---|
| Fund % | 3.98% | 2.69% | 4.25% | 4.54% |
| Indicative Benchmark % | 2.82% | 3.31% | 5.21% | 4.41% |
| Excess Return % | 1.16% | -0.62% | -0.96% | 0.13% |
Recent Performance
| Month to DateData as of 05-Mar-2021 | Quarter to DateData as of 05-Mar-2021 | Year to DateData as of 05-Mar-2021 | 1 MonthData as of 31-Jan-2021 | 3 MonthsData as of 31-Jan-2021 | |
|---|---|---|---|---|---|
| Fund % | 0.00% | 0.66% | 0.66% | 0.07% | 5.43% |
| Indicative Benchmark % | 0.07% | 1.07% | 1.07% | 0.48% | 5.62% |
| Excess Return % | -0.07% | -0.41% | -0.41% | -0.41% | -0.19% |
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.
Holdings
Holdings
Total
Holdings
101
Quality Rating View quality analysis
| Largest Overweight | Largest Underweight | |
|---|---|---|
| Quality Rating | B Rated | BB Rated |
| By % | 26.19% | -49.18% |
| Fund | 48.24% | 21.51% |
| Indicative Benchmark | 22.05% | 70.69% |
Average Credit Quality
BMaturity View maturity analysis
| Largest Overweight | Largest Underweight | |
|---|---|---|
| Maturity | 5-7 Years | 1-3 Years |
| By % | 7.26% | -14.93% |
| Fund | 31.35% | 6.16% |
| Indicative Benchmark | 24.09% | 21.10% |
Weighted Average Maturity
5.30 YearsDuration View duration analysis
| Largest Overweight | Largest Underweight | |
|---|---|---|
| Duration | Under 1 Year | 3-5 Years |
| By % | 15.50% | -12.61% |
| Fund | 22.74% | 25.52% |
| Indicative Benchmark | 7.24% | 38.13% |
Weighted Average Duration
2.57 Years
Industry
Total
Industries
26
Largest Overweight
Cable & Satellite TV
Largest Underweight
Automotive
Countries
Total
Countries
21
Largest Overweight
United Kingdom
Largest Underweight
Italy
Currency
Total
Currencies
5
Largest Overweight
euro
Largest Underweight
British pound sterling
The fund is fully hedged back to euro, although direct exposure may total less than 100%. It is important to note that there can be no assurances that the currency hedging employed will fully eliminate the shareholder's exposure to exchange rate fluctuations.
Team (As of 25-Feb-2021)
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 manager2014
since - Years at11
T. Rowe Price - Years investment27
experience
Michael Lesesne is a global high yield portfolio specialist in the Fixed Income Division. He supports the High Yield, Floating Rate Bank Loan, and Credit Opportunities Strategies, working closely with clients, prospects, and consultants. Michael is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.
Michael’s investment experience began in 1991, and he has been with T. Rowe Price since 2012, beginning as a global high yield portfolio specialist in the Fixed Income Investment Specialists department. Prior to T. Rowe Price, Michael was employed by Lord Abbett as a partner and director of credit research. Before that, Michael was a senior high yield credit analyst at Weiss, Peck & Greer and at TIAA-CREF.
Michael earned a B.A. in business economics from Brown University and an M.B.A. in finance from Columbia Business School.
- Years at8
T. Rowe Price - Years investment29
experience
Fee Schedule
| Share Class | Minimum Initial Investment and Holding Amount (EUR) | Minimum Subsequent Investment (EUR) | Minimum Redemption Amount (EUR) | Sales Charge (up to) | Investment Management Fee (up to) | Ongoing Charges |
|---|---|---|---|---|---|---|
| Class A | €1,000 | €100 | €100 | 5.00% | 115 basis points | 1.28% |
| Class I | €2,500,000 | €100,000 | €0 | 0.00% | 60 basis points | 0.67% |
| Class Q | €1,000 | €100 | €100 | 0.00% | 60 basis points | 0.71% |
| 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.
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.