Schroder International Selection Fund Global High Yield C Distribution GBP Hedged QV

Global Bonds

Rated Fund 2017-19. A high yield, higher risk fund

Schroder ISF Global High Yield* was highly commended in the Best Global Bond Fund category of Money Observer’s 2017 awards. It yields 4.8%, but not without a commensurate increase in risk.

It has more than 450 holdings, but invests at least two thirds of its assets in bonds that have a sub-investment grade rating. At the end of 2018, it had 87% of assets in stocks rated BB or lower.

Martha Metcalf assumed full responsibility for the fund in 2018. She had run the fund alongside Wesley Sparks, former head of US fixed income at Schroders, since its inception in 2004, but he stepped back from running money last year.

Metcalf believes many high-yield bonds are issued by sound companies or those with improving fundamentals, and that intensive company analysis as well as research of industry dynamics and macro trends can uncover good opportunities.

Drawing on a team of credit analysts, she employs a four-stage investment process, starting with analysis of economic data to identify major market trends and interest rate expectations, credit trends and default rates. The second stage is to decide on optimal investment strategies on a three to six-month time horizon.

The third is an assessment of relative value. This involves considering bonds’ positioning within a company’s capital structure. The fourth is all about risk management, both when a holding is purchased and as market conditions change.

At the end of 2018, more than 60% of the portfolio was in the US and more than 30% in Europe.

*Only the ‘C’ hedged to sterling share class is available to retail investors

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Schroder International Selection Fund Global High Yield C Distribution GBP Hedged QV
Manager
Schroder Investment Management (Europe) S.A.
Type
SICAV
ISIN
LU0441868451
Sector
Global Bonds
Launched
31/07/2009
OCF
0.83 %
Risk Rating
5
3 Year Sharpe
0.92
3 Year Alpha
-1.43
Yield
5.6 %
Benchmark
BBgBarc Gbl HY xCMBS xEMG 2% Cap
The fund aims to provide income and capital growth by investing in below investment grade fixed and floating rate securities issued worldwide. The fund invests at least two-thirds of its assets in fixed and floating rate securities that have a below investment grade credit rating (as measured by Standard & Poor’s or any equivalent grade of other credit rating agencies). The securities may be denominated in various currencies and issued by governments, government agencies, supra-nationals and companies worldwide. The fund may invest up to 10% of its assets in contingent convertible bonds. The fund may also invest in money market instruments and hold cash. Under exceptional circumstances (e.g. market crash or major crisis), the fund may be invested temporarily up to 100% of its net asset value in liquid assets such as bank deposits, certificates of deposit, commercial paper and treasury bills for cash flow management.
Holding %
Us Long Bond(Cbt) Bond 19/Jun/2019 Usm9 Comdty 3.64 %
Us 10yr Note (Cbt) Bond 19/Jun/2019 Tym9 Comdty 2.43 %
Sprint Corporation 7.12% 1.14 %
CCO Holdings, LLC/ CCO Holdings Capital Corp. 5% 0.98 %
PIONEER HLDG LLC / PIONEER FIN CORP 9% 0.85 %
Everi Payments Inc. 7.5% 0.76 %
CHENIERE ENERGY PARTNERS L P 5.62% 0.75 %
Bausch Health Companies Inc 5.75% 0.73 %
Us Long Bond(Cbt) Bond 19/Jun/2019 Usm9 Comdty 0.73 %
Vertiv Intermediate Holding Corporation 12% 0.70 %
Name
Schroder Investment Management (Europe) S.A.
Address
L-1736, Luxembourg, Luxembourg
UCITS
Yes
Legal Structure
SICAV

Managers

Martha Metcalf
Joined 12/31/2015

Martha is a Senior Portfolio Manager in the US Fixed Income Team, as well as co-lead for the Schroder Global High Yield fund, based in New York. She is also Head of US High Yield Credit research. She joined Schroders in October 2010 and is responsible for portfolio management within global high yield strategies. Prior to joining Schroders, she was a Managing Director and Head of US High Yield at Credit Suisse in New York from 2005 through 2010. From 2000 to 2005, she was a Managing Director and Portfolio Manager in Global High Yield Bonds at Invesco. She previously worked at J.P. Morgan Investment Management as Vice President and Portfolio Manager in High YieldShe has a BA in International Political Economy from Mount Holyoke and is a CFA Charterholder.

Data provided by Morningstar.

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