Global High Yield Capabilities
Barings Global High Yield Bond Fund
Income Potential Unfolded
CAPTURING ATTRACTIVE GLOBAL INCOME OPPORTUNITIES
Overall MORNINGSTAR RATINGTM1
1. Overall Morningstar Rating as of March 31, 2024 (EAA OE Global High Yield Bond). For the Tranche F USD Acc only, other share tranches may have different performance characteristics. Not intended to be offered to the retail public. Tranche F Shares are generally only available to feeder funds or fund of funds. Annual management fee of Tranche F Shares, which is currently 0%, is significantly lower than that of Tranche G Shares. Investors should note that the performance of Tranche F Shares is for reference only and does not represent the performance of Tranche G Shares.
Low GDP Growth has Limited Impact on High Yield Issuers
Historically, the high yield market has performed reasonably well in low growth environments. For instance, since 2010—despite Europe experiencing slower growth versus the U.S.—the European high yield bond market has been able to consistently outperform the U.S. on a like for like currency hedged basis.
Source: Bloomberg and ICE BofA. As of December 31, 2023. Returns in USD hedged terms.
Higher Credit Quality Profile Relative to History
It is worth noting that high yield bond markets remain on solid footing and have one of the highest credit rating profiles today relative to history. Many issuers are BB-rated, and only 10% of the market is comprised of CCC-rated companies.
Source: ICE BofA Non-Financial Developed Markets High Yield Constrained Index (HNDC). As of March 31, 2024.
Discounted Prices and Near-term Maturities Provide Capital Appreciation Potential
The discounted prices across the high yield bond market, together with record low duration and resilient corporate fundamentals, is presenting potentially attractive total return opportunities as companies proactively refinance. In the current market environment, we believe refinancings present an opportunity to increase total return prospects beyond the yield level on offer.
Sources: ICE BofA Non-Financial Developed Markets High Yield Constrained Index (HNDC). As of March 31, 2024. The return assumption is on the basis that bonds mature 12 months prior to legal maturity (as stated in the table), and that the bond does not default. For illustrative purposes only and is not indicative of actual investment return to be achieved by the Fund.
Note: Effective June 30, 2022, the ICE Fixed Income Index reflects transaction costs. As a result, existing index level total return, price return and excess return fields have been adjusted to reflect the new methodology. All return information prior to June 30, 2022 has not been adjusted.
A Flourishing Income Opportunity
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