Objective and investment policy
The fund aims to provide a combination of capital growth and income while considering environmental, social and governance (ESG) factors, and seeks to achieve a higher ESG rating than the global high yield market.
Investment policy and strategy
Core investment: At least 80% of the fund is invested in lower quality bonds, denominated in any currency, and issued by companies located in any country, including emerging markets.
The fund’s currency exposure is typically hedged back to the US dollar.
The fund invests in securities that meet the investment manager’s assessment of environmental, social and governance (ESG) criteria. Companies deemed to be in breach of the United Nations Global Compact principles and/or involved in defence and weapons are excluded. Investments in companies involved in industries such as tobacco and nuclear power are restricted.
Other investment: The fund may also invest in, asset-backed securities, contingent convertible debt securities, cash and assets that can be turned quickly into cash.
Derivatives: The fund may invest via derivatives and use derivatives with the aim of reducing the risks and costs of managing the fund.
Strategy in brief: The investment approach is based on an in-depth analysis of corporate bonds and their issuers, combined with an assessment of macroeconomic factors such as economic growth, interest rates and inflation. Spreading investments across issuers, industries and countries is an essential element of the fund’s strategy. ESG criteria are assessed as part of the credit analysis of bond issuers, and act as an additional filter to the fund’s exclusion policies.
Performance comparator: The fund is actively managed. The ICE BofA Merrill Lynch Global High Yield USD Hedged Index is a point of reference against which the performance of the fund may be measured.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund.
High yield bonds usually carry greater risk that the bond issuers may not be able to pay interest or return the capital.
The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.