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 September 30, 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 11% of the market is comprised of CCC-rated companies.
Source: ICE BofA Non-Financial Developed Markets High Yield Constrained Index (HNDC). As of September 30, 2024.
High Income Could Provide a Cushion in a Potentially Deteriorating Macro Environment
In the last 20 years, investments in high yield bonds at yields above 7% generated a positive return in the subsequent 12 months 84% of the time, with a median return of 11%.
Sources: ICE BofA Developed Markets High Yield Constrained Index (HYDC). Reference period is from 1 January 2004 to 31 January 2024. Based on monthly observations.
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.
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