Global High Income Opportunities | Capital Group

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TOTAL RETURN FIXED INCOME

Global High Income Opportunities

Vehicle: Collective Investment Trust, Separate Account

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Overview

Objective: Seeks high total return, with a large current income component, by investing primarily in global high-yield securities. 

  • Strategy inception date: 1998
  • Assets in strategy (millions): $961.7
  • Benchmark: 
    • 50% Bloomberg Barclays U.S. Corporate High-Yield Index, 2% Issuer Cap
    • 20% JP Morgan EMBI Global
    • 20% JP Morgan GBI-EM Global Diversified
    • 10% JP Morgan CEMBI Broad Diversified
  • Maximum below-investment-grade bonds (%): 100
  • Currency (%): USD allocation 30–100
  • Invests in: 
    • Emerging markets debt
      • Corporate
      • Sovereign
    • U.S./Non-U.S. high-yield corporate bonds
  • Tracking error estimate (bps)*: 150–350
  • Excess return estimate (bps)*: 75–175
  • Sources of excess return estimates (%):
    • Country allocation: 15
    • Sector allocation: 20
    • Security selection: 55
    • Currency exposure: 10
  • Minimum account size (millions):
    • Defined contribution: $0
    • Collective Investment Trust: $5
    • Separate Account: $100

Assets in strategy as of June 30, 2017.

For a DC collective investment trust, plan size of $250 million may be used to satisfy the minimum account size requirement.


Approach
  • Research is the cornerstone of Capital’s investment process, which integrates macroeconomic, fixed-income and equity analysis from all regions of the globe
  • Our fixed-income analysts leverage our integrated approach, typically specializing in one or more industries and/or sectors, and drawing on the work of their counterparts in our equity research group
  • Emerging markets analysts further cover a geographical region to better understand the investability of their universe and potential contagion correlation effects. Other fixed-income analysts focus on quantitative and qualitative research on securitized debt. In addition, a strategic group is dedicated to currencies, asset allocation, quantitative research, politics and other macro issues
  • The Global High-Yield team consists of several portfolio managers, each of whom manages a portion of the total portfolio, ensuring that the portfolio has diverse sources of return
  • The portfolio managers seek to add value through research-driven country, currency, sector and security selection, which may include substantial investments in individual bond markets and currencies based on our views of the macroeconomic cycle, monetary policy and similar issues
  • The portfolio managers also work closely with Capital’s traders, who provide invaluable information about anomalies, inefficiencies and deal flow in the market in addition to executing trades
  • We have a comprehensive framework for addressing risk
    • Our research process and The Capital System℠ help diversify the portfolio
    • Capital’s independent global investment control group monitors compliance with portfolio guidelines
    • Our legal and compliance team helps make certain we adhere to regulations in the markets in which we invest

History of Fixed Income at Capital Group

We began managing fixed-income assets for institutional clients in 1973, and Capital Fixed Income Investors has $284.3 billion in assets under management as of June 30, 2017.

We began managing a global high-yield strategy in 1998, after nearly a decade of experience managing both emerging markets debt and high-yield debt separately. We began investing in emerging markets debt in 1989, created an emerging markets debt fund in 1994, and most recently (2007) began managing emerging markets debt “linkers” strategies for institutional clients. We were one of the first to begin managing emerging markets equities in 1986 and launched our first private equity fund for emerging markets investments in 1992. Capital began managing high-yield bonds in 1984.
 


Portfolio Management Team

 

 

 

 

 

 

View investment results data

 

 

 


Resources


Fund Characteristics

Defined Benefit Plans (PDF)

Defined Contribution Plans (PDF)

Endowments/Foundations (PDF)


Additional Reports

Annual Report (PDF)

 

 

 


This material is designed for use solely by Qualified Purchasers, institutional investors and consultants. It may not be disseminated to or used by individual plan participants or retail investors.

The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

Any collective investment trusts (“CITs”) available under this strategy are maintained by Capital Bank and Trust Company (“trustee”), which has retained an affiliate to serve as investment adviser to the trustee for the CITs.

This information supplements or enhances required or recommended disclosure and presentation provisions of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.

All data as of June 30, 2017, unless otherwise specified. Returns are in USD. Periods greater than one year are annualized. Returns reflect the reinvestment of dividends, interest and other earnings.

Composite returns reflects the Capital Group Global High-Yield Fixed-Income Composite. Composite returns are preliminary and net of withholding taxes on dividends, interest and capital gains. Actual withholding tax rates vary according to the country of denomination and tax status of each portfolio. Composite net returns are calculated using the current highest management fees for institutional investors. Actual investment returns net of management fees may differ depending on, among other things, the applicable fee schedule and portfolio size. Composite risk characteristics are preliminary and gross of management fees. The analysis is based on monthly data, and periods greater than one year are annualized.

Portfolio reflects Capital Group Global High-Income Opportunities Trust (US).

Cash & equivalents include short-term securities, accrued income and other assets less liabilities. The “other” category may include equities, warrants, convertibles, preferreds, interest rate swaps and credit default swap indices.

Index reflects 50%/50% JP Morgan Emerging Markets Bond Index Global/ Credit Suisse High Yield Bond Index from January 1, 2000 to August 31, 2000, 100% Bloomberg Barclays Global High Yield Index to July 31, 2004, 50%/50% JP Morgan Emerging Markets Bond Index Global Diversified/ Credit Suisse High Yield Bond Index, Developed Countries Only to January 31, 2010, 50%/50% JP Morgan Emerging Markets Bond Index Global/Bloomberg Barclays U.S. Corporate High Yield, 2% Issuer Cap to December 31, 2012 and 50%/20%/20%/10% Bloomberg Barclays U.S. Corporate High-Yield Index, 2% Issuer Cap/JP Morgan EMBI Global/JP Morgan GBI-EM Global Diversified/JP Morgan CEMBI Broad Diversified thereafter. Sources: Bloomberg Index Services Ltd. Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. The Index is used with permission. The Index may not be copied, used, or distributed without J.P. Morgan’s prior written approval. Copyright 2017, J.P. Morgan Chase & Co. All rights reserved. Credit Suisse Group AG.

Each index is unmanaged.

Portfolio characteristics index values reflect PolyPaths analytics. Data for the portfolio and index use PolyPaths analytics engine calculation assumptions.

Totals may not reconcile due to rounding.

Securities offered through American Funds Distributors, Inc.

*Capital is an “active manager” that creates portfolios by selecting securities using fundamental research. The estimated excess return and tracking error numbers, shown gross of management fees, are based on a number of factors including our investment process, historical results and historical market conditions. We cannot provide any guarantee with respect to results or preservation of assets. The estimates provided should not be considered an assurance or guarantee of the risk or return of any portfolio or impose any liability on Capital.


Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing.