United Kingdom, Institutional
Change
This is a marketing communication. Please refer to the Fund Prospectus and KIID/KID and / or offering documents before making any final investment decisions. Please refer to the risks section at the bottom of this page.
Is there opportunity for high yield in today’s new economic era?
In an uncertain world, we believe a combination of patience, precision and pragmatism is pivotal in capturing the attractive potential of high-yield bonds.
Why invest?
-
Why Global high yield?
-
Why Wellington?
-
The Fund’s role in your client’s portfolio
Why Global high yield?
A marathon, not a sprint. Volatility is to be expected in the months and potentially years ahead, but we believe attractive fundamentals are in place to drive long-term success for the high yield asset class:
Attractive income and total return potential
Whilst the macro environment is uncertain, we believe current all-in yields provide a meaningful cushion to investors under various interest rate and spread scenarios, and support attractive total return potential for long-term investors.
Higher quality relative to history
Many of the companies in the high yield market are larger and more globally diversified than other fixed income markets, with less than 10% of the market made up of CCC-rated securities1.
Default projections in line with historical averages2
We believe the material growth in the private credit market in recent years should insulate the high yield market from any excess leverage build up and protect against recessionary level default rates.
Why Wellington?
We seek to provide our clients with the most desirable characteristics of the asset class: Total Return, Income3 and Diversification.
Experienced investment team
The portfolio managers on the high yield investment team average 26 years of professional experience with the benefit of managing across multiple credit cycles.
Time-tested investment process
Our unique process focuses on identifying companies with long-term competitive advantages whist also seeking to opportunistically capture mispricings as they arise.
Breadth and depth of research
The fund benefits from the expertise of Wellington’s credit, ESG4 and equity analysts. We believe a combination of bottom-up and top-down research input gives us an edge in security selection.
The Fund’s role in your client’s portfolio
In our opinion, high yield bonds can play an important role as a strategic long-term investment in a diversified portfolio, displaying characteristics traditionally linked with both fixed income and equities:
Potential for equity-like returns with less volatility.
Income-driving total return enhancement potential in a fixed income portfolio.
Broad opportunity set across the Global High Yield universe.
The fund in 60 seconds
The Wellington Global High Yield Bond Fund seeks long-term total returns in excess of the ICE BofA Global High Yield Constrained Index by utilising bottom-up fundamental research to invest primarily in debt securities worldwide which are considered to be below investment grade.
Investment examples
MasOrange
As the largest telecommunications operator in Spain, MasOrange provides gigabit internet, video, fixed-line telephone and mobile services to residential and business customers. MasOrange possesses key competitive advantages as the largest player in terms of scale and branding.
Forvia
A global provider of automotive equipment covering interiors, seating, lighting and electronics, as well as clean mobility technology and life cycle solutions. FORVIA possesses two key competitive advantages which enable the company to consistently generate stable free cash flow.
other fixed income funds
Wellington Global Impact Bond Fund
Wellington Global Credit ESG Fund
1ICE BofA Global High Yield Constrained Index, as of 31 December 2023. | 2Moody’s: Based on trailing global high yield default rates between 1 January 2005 and 31 December 2023. | 3This fund does not have an income objective. | 4The portfolio does not have a sustainable investment objective. While the evaluation of Sustainability Risks through the analysis of ESG factors is part of the investment process, it may not necessarily result in the exclusion of a security. Please refer to the sustainability related disclosures for information on the commitments of the portfolio: www.wellington.com/en/legal/sfdr.
Consider the risks
Investors should consider the risks that may impact their capital, before investing. The value of your investment may fluctuate from the time of the original investment. Please refer to the risks section enclosed. A decision to invest should take account of all the characteristics and objectives described in the Fund offering documents. Please refer to the sustainability related disclosures for information on the commitments of the portfolio: www.wellington.com/en/legal/sfdr.
Investment risks
BELOW INVESTMENT GRADE: Lower-rated or unrated securities may have a significantly greater risk of default than investment-grade securities, can be more volatile, less liquid, and involve higher transaction costs | CAPITAL: Investment markets are subject to economic, regulatory, market sentiment and political risks. All investors should consider the risks that may impact their capital, before investing. The value of your investment may become worth more or less than at the time of the original investment. The Fund may experience a high volatility from time to time. | CREDIT: The value of a bond may decline, or the issuer/guarantor may fail to meet payment obligations. Typically lower-rated bonds carry a greater degree of credit risk than higher-rated bonds. | EMERGING MARKETS: Emerging markets may be subject to custodial and political risks, and volatility. Investment in foreign currency entails exchange risks. | HEDGING: Any hedging strategy using derivatives may not achieve a perfect hedge. | INTEREST RATES: The value of bonds tends to decline as interest rates rise. The change in value is greater for longer-term than shorter-term bonds. | MANAGER: Investment performance depends on the investment management team and their investment strategies. If the strategies do not perform as expected, if opportunities to implement them do not arise, or if the team does not implement its investment strategies successfully; then a fund may underperform or experience losses. | SUSTAINABILITY: A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment.
PLEASE REFER TO THE FUND PROSPECTUS AND KIID/ KID FOR A FULL LIST OF RISK FACTORS AND PRE-INVESTMENT DISCLOSURES.