Strategy
Europe High Yield Bond
The Europe High Yield Bond Composite seeks to maximize total return primarily through investment in high yield corporate bonds denominated in European currencies.
3YR Return Annualised (Net)
(View Total Returns)
Tracking Error
(5 Years)
1YR Return (Net)
(View Total Returns)
Information Ratio
(5 Years)
Inception Date 31-Oct-2011
Performance figures calculated in EUR
Valuations and performance are computed in USD and converted to EUR. When converting U.S. Dollar composite returns, benchmarks, dispersion and asset data, the same exchange rate source is used consistently. Total returns in non-U.S. Dollar currencies are calculated by adjusting U.S. Dollar performance by the percent change in the U.S. Dollar/foreign currency exchange rate (as determined by an independent third party) for the time periods selected. Net of fees performance is calculated using the currency-converted gross performance and then deducting the highest applicable EUR fee without the benefit of breakpoints.
Strategy
Investment Approach
- Strategy 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 strategy 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 excess return: 100–150 basis points over a full market cycle. (Not a formal objective and it can be changed without prior notice.)
- Target tracking error: 200–400 basis points
Performance
Annualised Performance
Quarterly| 1 YR | 3 YR Annualised |
5 YR Annualised |
Since Inception Annualised |
|
|---|---|---|---|---|
| Composite Gross % | -11.06% | -3.08% | 0.44% | 5.28% |
| Composite Net % | -11.51% | -3.56% | -0.06% | 4.75% |
| Benchmark % | -9.87% | -1.44% | 0.97% | 4.94% |
| Excess Return (Gross) % | -1.19% | -1.64% | -0.53% | 0.34% |
Recent Performance
| 3 MonthsData as of 31-Mar-2020 | Year to DateData as of 31-Mar-2020 | |
|---|---|---|
| Composite Gross % | -16.98% | -16.98% |
| Composite Net % | -17.09% | -17.09% |
| Benchmark % | -14.52% | -14.52% |
| Excess Return (Gross) % | -2.46% | -2.46% |
Returns for time periods greater than one year are annualised.
Past performance is not a reliable indicator of future performance.
Gross performance returns are presented before management and all other fees, where applicable, but after trading expenses. Net of fees performance reflects the deduction of the highest applicable management fee that would be charged based on the fee schedule contained within this material, without the benefit of breakpoints. Gross and net performance returns reflect the reinvestment of dividends and are net of all non-reclaimable withholding taxes on dividends, interest income, and capital gains.
Holdings
Holdings
Total
Holdings
84
Quality Rating View quality analysis
| Largest Overweight | Largest Underweight | |
|---|---|---|
| Quality Rating | B Rated | BB Rated |
| By % | 21.46% | -44.87% |
| Portfolio | 45.86% | 24.89% |
| Benchmark | 24.40% | 69.76% |
Average Credit Quality
B+Maturity View maturity analysis
| Largest Overweight | Largest Underweight | |
|---|---|---|
| Maturity | 7-10 Years | 1-3 Years |
| By % | 4.57% | -8.25% |
| Portfolio | 16.36% | 7.27% |
| Benchmark | 11.79% | 15.51% |
Weighted Average Maturity
5.78 YearsDuration View duration analysis
| Largest Overweight | Largest Underweight | |
|---|---|---|
| Duration | 3-5 Years | 5-7 Years |
| By % | 5.15% | -6.09% |
| Portfolio | 52.48% | 14.72% |
| Benchmark | 47.32% | 20.81% |
Weighted Average Duration
4.17 YearsIndustry
Total
Industries
25
Largest Overweight
Cable Operators
Largest Underweight
Other Telecommunications
Countries
Total
Countries
18
Largest Overweight
United Kingdom
Largest Underweight
Italy
Currency
Total
Currencies
5
Largest Overweight
euro
Largest Underweight
British pound sterling
Team (As of 02-Jul-2020)
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.
- Portfolio manager2011
since - Years at11
T. Rowe Price - Years investment27
experience
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.