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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

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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SICAV

Global High Yield Bond Fund

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

ISIN LU1076275962 Bloomberg TRGHIHE:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

2.59%
$1.4b

1YR Return
(View Total Returns)

Manager Tenure

2.85%
5yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.15
6.60%

Inception Date 09-Jul-2014

Performance figures calculated in EUR

Other Literature

31-Dec-2020 - Michael Della Vedova, Portfolio Manager,
We are still finding value in corners of the market where companies can benefit from a gradual reopening of the economy or from the vaccine rollouts. A fair amount of cash remains on the sidelines and, in our view, high yield is one of the few fixed income market segments offering meaningful income. We believe this dynamic could continue to drive strong demand for high yield bonds and further spread tightening over the next several months.
Michael Della Vedova
Michael Della Vedova, Portfolio Manager

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.

 

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

  • 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 In | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 2.85% 2.59% 5.08% 2.72% 2.85%
Indicative Benchmark % 3.64% 3.04% 6.26% 3.30% 3.64%
Excess Return % -0.79% -0.45% -1.18% -0.58% -0.79%

Inception Date 09-Jul-2014

Manager Inception Date 31-Dec-2019

Indicative Benchmark: J.P. Morgan Global High Yield Index Hedged to EUR

Data as of 31-Dec-2020

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 2.85% 2.59% 5.08% 2.72%
Indicative Benchmark % 3.64% 3.04% 6.26% 3.30%
Excess Return % -0.79% -0.45% -1.18% -0.58%

Inception Date 09-Jul-2014

Indicative Benchmark: J.P. Morgan Global High Yield Index Hedged to EUR

Data as of 31-Dec-2020

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 15-Jan-2021 Quarter to DateData as of 15-Jan-2021 Year to DateData as of 15-Jan-2021 1 MonthData as of 31-Dec-2020 3 MonthsData as of 31-Dec-2020
Fund % 0.25% 0.25% 0.25% 1.54% 5.78%
Indicative Benchmark % 0.35% 0.35% 0.35% 1.94% 6.23%
Excess Return % -0.10% -0.10% -0.10% -0.40% -0.45%

Inception Date 09-Jul-2014

Indicative Benchmark: J.P. Morgan Global High Yield Index Hedged to EUR

Indicative Benchmark: J.P. Morgan 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-Dec-2020 - Michael Della Vedova, Portfolio Manager,
High yield bonds strongly advanced in December as the rollout of the first highly effective coronavirus vaccines reinforced investor optimism. The passage of new fiscal stimulus in the U.S. and of a post-Brexit trade deal in Europe also supported sentiment. The worsening pandemic and tightening lockdowns in many countries may have restrained the gains, however. The energy segment was the standout as all high yield industries produced positive results, and returns of the CCC rating tier eclipsed the performance of higher-quality bonds. Within the portfolio, credit selection in the chemicals and restaurants segments aided relative performance, as did our underweight allocation in the information technology industry. However, our overweight allocation to cable operators held back gains. Security selection and, to a lesser extent, our underweight within the CCC rating tier hurt.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 15.51% Was (30-Nov-2020) 15.75%
Other View Top 10 Issuers

Monthly data as of31-Dec-2020

Holdings

Total
Holdings
502
Largest Holding iHeartCommunications 1.04% Was (30-Sep-2020) 1.02%
Top 10 Holdings 8.03%
Other View Full Holdings Quarterly data as of  31-Dec-2020

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating Short Term BB Rated
By % 3.72% -10.37%
Fund 3.72% 26.22%
Indicative Benchmark 0.00% 36.59%

Average Credit Quality

B+

Monthly Data as of  31-Dec-2020
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 % 6.40% -9.13%
Fund 34.98% 4.93%
Indicative Benchmark 28.58% 14.06%

Weighted Average Maturity

6.15 Years

Monthly Data as of  31-Dec-2020
Indicative Benchmark:  J.P. Morgan Global High Yield Index

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration Cash Holdings 3-5 Years
By % 3.72% -4.15%
Fund 3.72% 25.12%
Indicative Benchmark 0.00% 29.27%

Weighted Average Duration

2.96 Years

Monthly Data as of  31-Dec-2020
Indicative Benchmark: J.P. Morgan Global High Yield Index

30-Sep-2020 - Michael Della Vedova, Portfolio Manager,

We augmented our risk-aware positioning during the quarter to include select recovery themes as we became more constructive on the effectiveness of therapeutic treatments and prospects for a vaccine in the medium term. Consistent with our management style, we outperformed amid significant volatility in March due to the emergence of the coronavirus pandemic, and broadly kept pace as the high yield market strongly rebounded during the second quarter. However, we gave back some gains during the last three months as risk was indiscriminately rewarded, as evidenced by the CCC rating tier's outperformance during the quarter.

Opportunities in Issuers With Sound Fundamentals

We remained invested in or added to select coronavirus-impacted issuers such as software and technology company Sabre, vehicle rental services provider Avis Budget Group, cruise line operator Royal Caribbean, and online travel booking company Expedia. These issuers have sound fundamental credit stories and competitive positions in their industries that we believe offer compelling risk-adjusted return opportunities.

Selectively Participated in New Deals

Through collaboration with the firm's equity and investment-grade corporate bond analysts, we arranged calls with executives at Delta Air Lines prior to this issuer pricing new deals. This helped us gain confidence in its SkyMiles loyalty program financing where the bonds are collateralized by cash payments from major U.S. banks' credit card rewards programs. We subsequently participated in the deal, which we believe provides opportunities to benefit from a recovery in consumer spending and the continuing desire of consumers to accumulate air miles.

Defensively Positioned in Energy

Within energy, we broadly avoided distressed names in favor of issuers with large asset bases and durable business models. For instance, we maintained an overweight to large, diversified, and well-capitalized midstream companies, which tend to have contractual-based revenue models, and to high quality exploration and production (E&P) names. Our investments in fallen angels such as Occidental Petroleum, whose size and scale are unmatched in a high yield market that has become unwilling to finance weaker cash-burning E&Ps, have broadly benefited relative performance.

Industry

Total
Industries
33
Largest Industry Energy 11.43% Was (30-Nov-2020) 11.10%
Other View complete Industry Diversification

Monthly Data as of 31-Dec-2020

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

Largest Overweight

Cable Operators
By5.37%
Fund 9.64%
Indicative Benchmark 4.27%

Largest Underweight

Services
By-2.85%
Fund 4.50%
Indicative Benchmark 7.35%

Monthly Data as of 31-Dec-2020

31-Dec-2020 - Michael Della Vedova, Portfolio Manager,
We continue to find value in names that are likely to benefit from an economic recovery and have selectively increased our exposure within segments such as leisure and transportation. However, the portfolio still has a lower risk profile relative to the market index. For example, we are overweight cable operators and utilities, segments that generally exhibit more stable fundamentals. We also kept an underweight position and high-quality bias within energy as weaker global demand is keeping oil prices suppressed.

Countries

Total
Countries
18
Largest Country United States 81.13% Was (30-Nov-2020) 82.41%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2020

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

Largest Overweight

United States
By8.76%
Fund 81.13%
Indicative Benchmark 72.37%

Largest Underweight

Brazil
By-3.34%
Fund 1.26%
Indicative Benchmark 4.60%

Monthly Data as of 31-Dec-2020

Currency

Total
Currencies
3
Largest Currency 99.96% Was (30-Nov-2020) 99.94%
Other View completeCurrency Diversification

Monthly Data as of  31-Dec-2020

Indicative Benchmark :

Largest Overweight

euro
By 0.04%
Fund 0.04%
Indicative Benchmark 0.00%

Largest Underweight

U.S. dollar
By -0.04%
Fund 99.96%
Indicative Benchmark 100.00%

Monthly Data as of  31-Dec-2020

Team (As of 15-Jan-2021)

Michael Della Vedova

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 manager
    since
    2015
  • Years at
    T. Rowe Price
    11
  • Years investment
    experience
    27
Rodney M.  Rayburn, CFA

Rodney Rayburn is a portfolio manager in the Fixed Income Division, managing the Credit Opportunities and High Yield Bond Strategies. He is president of the Credit Opportunities Fund, Inc. He also is executive vice president of the High Yield Fund, Inc., and Institutional Income Funds, Inc., and chairman of their respective Investment Advisory Committees. He is a member of the Investment Advisory Committee for the Balance Fund. Rodney is a vice president of T. Rowe Price Associates, Inc., T. Rowe Price Group, Inc., and T. Rowe Price Trust Company.

Rodney’s investment experience began in 1999, and he has been with T. Rowe Price since 2014, beginning in the Fixed Income Division as a high yield analyst focused on distressed and special situations. In 2015, he was promoted to portfolio manager on the High Yield team. Prior to T. Rowe Price, Rodney was employed by Värde Partners as a managing director, and he was actively involved in performing and nonperforming loans, bonds, and reorganized equities across a variety of industries. He also was a senior investment analyst at Stark Investments.

Rodney earned a B.S. in economics from the Georgia Institute of Technology and an M.B.A. in finance and economics from The University of Chicago, Booth School of Business. Rodney also has earned the Chartered Financial Analyst® designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Fund manager
    since
    2020
  • Years at
    T. Rowe Price
    6
  • Years investment
    experience
    21

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (USD) Minimum Subsequent Investment (USD) Minimum Redemption Amount (USD) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $1,000 $100 $100 5.00% 115 basis points 1.24%
Class I $2,500,000 $100,000 $0 0.00% 60 basis points 0.64%
Class Jd $10,000,000 $0 $0 0.00% 0 basis points 0.02%
Class Q $1,000 $100 $100 0.00% 60 basis points 0.68%
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.