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Schroders launches Euro High Yield Bond fund

Frankfurt Europe European City 480

Schroders has launched a euro high yield bond fund in its Luxembourg range.

The Schroder ISF Euro High Yield Sicav fund aims to provide capital growth and income and will invest in euro-denominated bonds issued by companies, governments and government agencies worldwide.

The fund will be managed by fixed income fund manager Konstantin Leidman, who currently manages the euro high yield component of the Schroder ISF Global High Yield fund.

A minimum of 70 per cent of the fund, excluding cash, will be invested in sub-investmet grade bonds, those awarded lower ratings by credit agencies.

The fund is benchmarked against the Bank of America Merrill Lynch Euro High Yield Constrained index.

The ‘A’ share class has a 5.26 per cent initial charge and 1.3 per cent ongoing charge, while its ‘C’ share class carries a 1 per cent initial charge and a 0.8 per cent ongoing charge.

Leidman joined Schroders in August 2012 from UBS Global Asset Management, where he was the portfolio manager of its euro high yield fund.

Leidman says: “The European debt crisis is currently providing numerous opportunities for active investors in European high yield bonds. This market has grown considerably over the last decade, and we expect this trend to continue with further growth as a result of bank deleveraging and downgrades of countries in peripheral Europe. In the low rate environment there is a strong case for an asset class that provides attractive risk-adjusted returns with a strong income generation component.

“By combining fundamental bottom-up research of high yield bond issuers with top-down macro analysis, Schroder ISF EURO High Yield allows us to provide our clients with a strong product offering in this growing and increasingly important asset class.”

The launch comes after it recently added a Chinese bond fund to the range.


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