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SICAV

Global High Yield Bond Fund

Seeks to capture enhanced returns from a diversified global portfolio of income bearing, high yield securities.

ISIN LU0133082254 Bloomberg TRPGHBA:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

5.32%
$1.4b

1YR Return
(View Total Returns)

Manager Tenure

9.57%
4yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.86
1.27%

Inception Date 17-Aug-2001

Performance figures calculated in USD

Other Literature

31-Oct-2019 - Mark Vaselkiv, Portfolio Manager,
We believe high yield bonds appear attractively positioned compared to many other fixed income sectors in the current environment, given their relatively low duration profile and higher income. Continued economic growth, even slow growth, is supportive for high yield issuers, as they are typically more sensitive to macroeconomic factors. Corporate fundamentals remain largely stable, and we expect default activity to remain below the historical average this year and in 2020.
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.

Click for Manager Outlook
 

Strategy

Manager's Outlook

High yield bonds are best structured to outperform amid a backdrop of low interest rates and steady economic growth, as these companies are typically more sensitive to macroeconomic factors. The Federal Reserve's pivot from an outlook that called for multiple rate hikes in 2019 to rate cuts significantly improved sentiment toward risk assets. Company fundamentals are largely solid outside of a few troubled industries, and maturities have been extended. We expect additional bouts of volatility this year and in 2020. However, as dedicated long-term high yield investors, we believe volatility can create opportunities for those who remain invested in the asset class.

As always, we aim to deliver high current income while seeking to contain volatility inherent in this market. Our team maintains a commitment to credit research and risk-conscious investing that has led to favorable returns for our high yield clients over various market cycles.

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

  • Focus on BB/B securities, with a measured allocation to lower-quality bonds when valuations are compelling.
  • Proprietary fundamental research is key — emphasis on industries that enjoy stable cash flow and rational competitive environments.
  • Extensive analyst interaction across sectors and asset classes promotes broad credit perspective.
  • Disciplined risk management practices employed in conjunction with broad portfolio diversification to manage risk profile.

Portfolio Construction

  • Diversified portfolio structure of high yield corporate bonds: 250-350 issuers
  • Industry exposure typically will range +/- 3% around benchmark weight
    • Conservative exposure guidelines to individual issuers:
    • BB issuer: 3% maximum
    • B issuer: 2% maximum
    • CCC issuer: 1% maximum

Performance (Class A)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 9.57% 5.32% 4.28% 6.66% 4.81%
Indicative Benchmark % 8.97% 6.35% 5.37% 7.99% 6.26%
Excess Return % 0.60% -1.03% -1.09% -1.33% -1.45%

Inception Date 17-Aug-2001

Manager Inception Date 07-Jul-2015

Indicative Benchmark: J.P. Morgan Global High Yield Index

Data as of  31-Oct-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 7.42% 5.36% 4.42% 6.73%
Indicative Benchmark % 6.88% 6.40% 5.47% 8.13%
Excess Return % 0.54% -1.04% -1.05% -1.40%

Inception Date 17-Aug-2001

Indicative Benchmark: J.P. Morgan Global High Yield Index

Data as of  30-Sep-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 15-Nov-2019 Quarter to DateData as of 15-Nov-2019 Year to DateData as of 15-Nov-2019 1 MonthData as of 31-Oct-2019 3 MonthsData as of 31-Oct-2019
Fund % 0.06% 0.35% 12.92% 0.29% 1.65%
Indicative Benchmark % 0.10% 0.56% 11.89% 0.46% 0.93%
Excess Return % -0.04% -0.21% 1.03% -0.17% 0.72%

Inception Date 17-Aug-2001

Indicative Benchmark: J.P. Morgan Global High Yield Index

Indicative Benchmark: J.P. Morgan Global High Yield Index

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.

31-Oct-2019 - Mark Vaselkiv, Portfolio Manager,
High yield bonds marginally advanced in October. Improvement in the macro environment, generally favourable corporate earnings reports, and equity market gains were broadly supportive for risk assets. Most high yield segments produced gains, and BB rated bonds outpaced lower qualities. The health care sector was a top performer as opioid litigation settlement details became more concrete. Energy posted the steepest losses due to falling oil prices amid global oversupply concerns. Within the portfolio, credit selection in the metals and mining and information technology segments contributed to relative performance, as did our overweight to cable operators. However, our underweight to the building and real estate segment was a drag on relative performance. Security selection in the health care and chemicals sectors also held back returns.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 18.20% Was (30-Sep-2019) 18.72%
Other View Top 10 Issuers

Monthly data as of 31-Oct-2019

Holdings

Total
Holdings
391
Largest Holding U.S. Treasury Notes 1.90% Was (30-Jun-2019) 1.91%
Top 10 Holdings 11.25%
Other View Full Holdings Quarterly data as of 30-Sep-2019

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating B/CCC Rated BB Rated
By % 6.95% -13.98%
Fund 9.44% 25.79%
Indicative Benchmark 2.49% 39.78%

Average Credit Quality

B+

Monthly Data as of 31-Oct-2019
Indicative Benchmark:  J.P. Morgan 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 5-7 Years 1-3 Years
By % 8.06% -9.60%
Fund 42.70% 5.11%
Indicative Benchmark 34.64% 14.71%

Weighted Average Maturity

6.11 Years

Monthly Data as of 31-Oct-2019
Indicative Benchmark:  J.P. Morgan Global High Yield Index

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration Equity 3-5 Years
By % 2.50% -2.83%
Fund 2.50% 32.23%
Indicative Benchmark 0.00% 35.07%

Weighted Average Duration

3.02 Years

Monthly Data as of 31-Oct-2019
Indicative Benchmark:  J.P. Morgan Global High Yield Index

30-Sep-2019 - Mark Vaselkiv, Portfolio Manager,

We have moved toward a more defensive positioning, as there is currently less relative value in the market than in early 2019. Nevertheless, our analysts continue to find idiosyncratic situations that we believe have the potential to generate meaningful gains.

Utilities exposure augmented

As part of our defensive positioning, we have increased our allocation to utilities throughout the year. In our view, utilities is one of the most attractive and defensive industries in a slowing economy. For example, we initiated a modest allocation to the investment-grade utility space through Edison International, which, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in the U.S. We invested at lower dollar prices, and our holdings have since appreciated.

Remaining underweight to energy

Our long-term bearish outlook for oil prices is driven by oversupply concerns as shale oil technology in the U.S. increases productivity and breakevens decline. The market has had zero tolerance for lower-rated energy names whose performance falls short of expectations and little room for operational errors. As such, we have maintained an underweight to the energy sector and, in our view, are under-risk relative to benchmarks.

Industry

Total
Industries
31
Largest Industry Energy 12.57% Was (30-Sep-2019) 12.64%
Other View complete Industry Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: J.P. Morgan Global High Yield Index

Largest Overweight

Cable Operators
By6.84%
Fund 11.77%
Indicative Benchmark 4.93%

Largest Underweight

Building & Real Estate
By-2.95%
Fund 0.31%
Indicative Benchmark 3.26%

Monthly Data as of 31-Oct-2019

31-Oct-2019 - Mark Vaselkiv, Portfolio Manager,
We are currently overweight cable operators, relative to the market index, because these issuers generally exhibit defensive characteristics due to subscription-based, recurring-revenue business models. Potential M&A activity within cable and wireless could also create further opportunities, in our view. We are also overweight financials in the portfolio, largely due to high yield-rated hybrid securities issued by investment-grade banks. Conversely, we remain underweight retail as traditional retailers have struggled to adapt to changes in consumer behaviour, such as increased internet shopping and price competition from online retailers.

Countries

Total
Countries
22
Largest Country United States 77.79% Was (30-Sep-2019) 79.34%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: J.P. Morgan Global High Yield Index

Largest Overweight

United States
By7.92%
Fund 77.79%
Indicative Benchmark 69.86%

Largest Underweight

Brazil
By-2.38%
Fund 2.45%
Indicative Benchmark 4.83%

Monthly Data as of 31-Oct-2019

Currency

Total
Currencies
4
Largest Currency U.S. dollar 99.94% Was (30-Sep-2019) 99.91%
Other View complete Currency Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark : J.P. Morgan Global High Yield Index

Largest Overweight

euro
By 0.07%
Fund 0.07%
Indicative Benchmark 0.00%

Largest Underweight

U.S. dollar
By -0.06%
Fund 99.94%
Indicative Benchmark 100.00%

Monthly Data as of 31-Oct-2019

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 26 years of investment experience, 10 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

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 1.25%
Class I $2,500,000 $100,000 $0 0.00% 60 basis points 0.66%
Class Jd $10,000,000 $0 $0 0.00% 0 basis points 0.03%
Class Q $15,000 $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.

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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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