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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 LU1272762938 Bloomberg TRPGADE:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

6.62%
$142.5m

1YR Return
(View Total Returns)

Manager Tenure

14.37%
4yrs

Information Ratio
(3 Years)

Tracking Error
(3 Years)

0.48
6.15%

Inception Date 05-Aug-2015

Performance figures calculated in EUR

Other Literature

31-Aug-2019 - Mark Vaselkiv, Portfolio Manager,
We remain cautiously optimistic about the high yield asset class for the remainder of this year. Company fundamentals remain stable across most regions, in our view, but this is counterbalanced by geopolitical and macroeconomic concerns. Ongoing trade tensions, the continued rise of populist politics, and Brexit negotiations may trigger additional bouts of volatility. Against this backdrop, we believe that the flexibility to adjust our allocations based on fundamental research will be paramount.
Mark J. Vaselkiv
Mark J. Vaselkiv, Co-Portfolio Manager

Mark Vaselkiv is chief investment officer of Fixed Income at T. Rowe Price. He is lead portfolio manager of the firm's Global High Yield and Global High Income Strategies as well as head of the Global High Yield team in the Fixed Income Division. He is additionally a member of both the Fixed Income Steering Committee and the firm's Asset Allocation Committee. Mr. Vaselkiv is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and T. Rowe Price Trust Company.

 

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 Ad | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 14.37% 6.62% N/A 5.94%
Indicative Benchmark % 4.66% 3.64% N/A 4.40%
Excess Return % 9.71% 2.98% N/A 1.54%

Inception Date 05-Aug-2015

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

Data as of  31-Aug-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 10.94% 6.56% N/A 5.02%
Indicative Benchmark % 5.33% 5.05% N/A 4.52%
Excess Return % 5.61% 1.51% N/A 0.50%

Inception Date 05-Aug-2015

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

Data as of  30-Jun-2019

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 16-Sep-2019 Quarter to DateData as of 16-Sep-2019 Year to DateData as of 16-Sep-2019 1 MonthData as of 31-Aug-2019 3 MonthsData as of 31-Aug-2019
Fund % 0.97% 5.51% 15.99% 1.19% 4.59%
Indicative Benchmark % 0.62% 0.89% 9.18% -0.20% 2.44%
Excess Return % 0.35% 4.62% 6.81% 1.39% 2.15%

Inception Date 05-Aug-2015

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

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

Performance figures calculated in EUR

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.

31-Aug-2019 - Mark Vaselkiv, Portfolio Manager,
High yield bonds across the globe posted mixed results in August. In the U.S., the high yield market posted flat results after retracing earlier losses during the second half of the month. Tariff headlines, recession fears, and equity volatility created a challenging performance environment. The European high yield market advanced as solid corporate earnings reports fuelled strong demand, which, combined with a lack of new issuance, created a supportive technical backdrop. Emerging markets debt experienced weakness during the month, largely due to a sharp decline in Argentinian corporate bonds after a surprising primary election result for President Mauricio Macri. Although most sub-investment grade sectors recorded gains, commodities weakness caused the energy segment to decline sharply. Returns across the ratings spectrum were bifurcated, as risk aversion caused BB-rated bonds to outperform lower quality debt. Within the portfolio, credit selection in the energy industry and positioning in the cable operators segment contributed to relative performance. Conversely, our choice of credits in the manufacturing and services sectors weighed on relative results.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 14.95% Was (31-Jul-2019) 15.03%
Other View Top 10 Issuers

Monthly data as of 31-Aug-2019

Holdings

Total
Holdings
203
Largest Holding Bausch Health Americas 1.71% Was (31-Mar-2019) 0.38%
Top 10 Holdings 11.30%
Other View Full Holdings Quarterly data as of 30-Jun-2019

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating BB/B Rated BB Rated
By % 17.85% -35.47%
Fund 17.85% 19.38%
Indicative Benchmark 0.00% 54.85%

Average Credit Quality

B+

Monthly Data as of 31-Aug-2019
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 % 10.38% -15.25%
Fund 25.38% 5.60%
Indicative Benchmark 15.00% 20.85%

Weighted Average Maturity

6.02 Years

Monthly Data as of 31-Aug-2019
Indicative Benchmark:  ICE BofAML Global High Yield Index

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration Cash Holdings Under 1 Year
By % 7.97% -4.11%
Fund 7.97% 10.71%
Indicative Benchmark 0.00% 14.82%

Weighted Average Duration

3.07 Years

Monthly Data as of 31-Aug-2019
Indicative Benchmark:  ICE BofAML Global High Yield Index

Industry

Total
Industries
29
Largest Industry Financial 12.33% Was (31-Jul-2019) 14.23%
Other View complete Industry Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark: ICE BofAML Global High Yield Index

Largest Overweight

Cable Operators
By6.65%
Fund 10.66%
Indicative Benchmark 4.01%

Largest Underweight

Other Telecommunications
By-3.12%
Fund 2.61%
Indicative Benchmark 5.73%

Monthly Data as of 31-Aug-2019

31-Aug-2019 - Mark Vaselkiv, 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. Potential M&A activity among cable and wireless companies could also create further opportunities, in our view. Conversely, we maintain an underweight to the ‘other telecommunications or wirelines’ segment due to long-term trends supporting the growth of the wireless industry.

Countries

Total
Countries
29
Largest Country United States 45.98% Was (31-Jul-2019) 50.01%
Other View complete Country Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark: ICE BofAML Global High Yield Index

Largest Overweight

Netherlands
By3.07%
Fund 4.29%
Indicative Benchmark 1.21%

Largest Underweight

United States
By-8.91%
Fund 45.98%
Indicative Benchmark 54.89%

Monthly Data as of 31-Aug-2019

31-Aug-2019 - Mark Vaselkiv, Portfolio Manager,
We reduced our overweight to emerging market issuers as we think relative value versus developed markets has moderated over the course of 2019. We are looking to close our underweight to European high yield issuers as the technical backdrop in the sector begins to improve.

Currency

Total
Currencies
3
Largest Currency U.S. dollar 99.60% Was (31-Jul-2019) 99.78%
Other View complete Currency Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark : ICE BofAML Global High Yield Index

Largest Overweight

U.S. dollar
By 17.34%
Fund 99.60%
Indicative Benchmark 82.26%

Largest Underweight

euro
By -15.20%
Fund 0.31%
Indicative Benchmark 15.51%

Monthly Data as of 31-Aug-2019

31-Aug-2019 - Mark Vaselkiv, 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 31-Aug-2019)

Mark J. Vaselkiv

Mark Vaselkiv is chief investment officer of Fixed Income at T. Rowe Price. He is lead portfolio manager of the firm's Global High Yield and Global High Income Strategies as well as head of the Global High Yield team in the Fixed Income Division. He is additionally a member of both the Fixed Income Steering Committee and the firm's Asset Allocation Committee. Mr. Vaselkiv is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and T. Rowe Price Trust Company.

Mr. Vaselkiv has 35 years of investment experience, 31 of which have been at T. Rowe Price. He started at the firm in 1988 as a high yield corporate credit analyst with a special focus on forest products and gaming and was appointed to the high yield portfolio management team in 1996. He began his investment career in 1984 as a credit analyst for Prudential Insurance Company. In 1986, he became a credit analyst and vice president at Shenkman Capital Management.

Mr. Vaselkiv earned a B.A. in political science from Wheaton College, Illinois, and an M.B.A. in finance from New York University, Leonard N. Stern School of Business.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    31
  • Years investment
    experience
    35
Michael Della Vedova

Michael Della Vedova is a global high yield portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Della Vedova is a portfolio manager of the European High Yield Strategy and co-portfolio manager for the firm's Global High Yield Strategy. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Della Vedova has 24 years of investment experience, eight of which have been with T. Rowe Price. Prior to joining the firm in 2009, he was a cofounder and partner of Four Quarter Capital, a credit hedge fund focusing on below investment-grade European corporate debt. Mr. Della Vedova also spent six years as a senior analyst and assistant portfolio manager with Muzinich & Company Limited in London.

Mr. Della Vedova earned both an LL.B. and a B.Com. in finance from the University of New South Wales and a G.D.L.P. from the University of Technology, Sydney, Australia. He also was admitted as a solicitor to the Supreme Court of New South Wales, Sydney.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    10
  • Years investment
    experience
    26
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
    4
  • Years investment
    experience
    27

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount Minimum Subsequent Investment Minimum Redemption Amount Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $15,000 $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 $15,000 $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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