Neuberger Berman has extended its high yield capabilities with the addition of a global high yield bond strategy.
The new Dublin-domiciled UCITS vehicle, the Neuberger Berman Global High Yield Bond Fund, will use the resources of the group’s USD37.6 billion high yield franchise – which spans the US, European and emerging market high yield sectors.
Patrick Flynn (pictured), an experienced portfolio manager on Neuberger Berman’s USD7.8 billion High Yield Bond Fund, will lead the new strategy – in collaboration with colleagues from the US high yield team and the managers behind the group’s European high yield bond strategy and its suite of emerging market debt vehicles.
The Neuberger Berman High Yield Bond Fund recently celebrated its 10-year anniversary. It is first quartile over that time period and received a 5-star Morningstar Rating as at 31 May 2016.
Global high yield markets have grown more than 250 per cent in the past 10 years, with significant expansion coming from Europe and emerging markets. The asset class has provided a strong risk-return profile over this period, delivering ‘equity-like’ returns with lower volatility. Global high yield also offers a significant yield pick-up against other fixed income assets, particularly government bonds and investment grade credit.
“The depth and breadth of the global high yield universe has developed markedly in recent years, with investors attracted to its defensive characteristics and low correlation to other asset classes,” Flynn says.
“In our view, global high yield valuations are compensating investors for the default risk in the market. Excluding commodity sectors, credit quality across global high yield markets remains solid, which should set the scene for gradual spread tightening.”
Tom Douie, head of intermediary, EMEA at Neuberger Berman, says: “At Neuberger Berman we have a deeply established high yield franchise, built up over many years, as well as an extensive emerging market debt platform with over USD9 billion in assets under management. The launch of the Global High Yield Bond Fund, driven by demand from our clients, is a natural extension of our capabilities in this asset class. Global high yield offers an attractive income stream, which has increased in importance in recent times as investors face the reality of a yield constrained world.”
The Neuberger Berman Global High Yield Bond Fund is a sub-fund of the Irish-domiciled UCITS fund umbrella, Neuberger Berman Investment Funds. It launched on 4 August 2016 and is registered for sale across the UK, Europe and Asia.