PGIM Investments has expanded its suite of Ucits high yield bond solutions with the launch of a global high yield fund.
The PGIM Global High Yield Bond Fund seeks to identify attractive high yield credits in multiple countries and currencies around the world and is designed to benefit from enhanced diversification and alpha through active regional and currency allocations absent from just U.S. or European high yield.
Managed by Robert Cignarella and Jonathan Butler, members of the PGIM Fixed Income Global Leveraged Finance Team, the Fund primarily invests in developed markets while applies hedges to mitigate currency risk.
The 50-strong highly experienced Global Leveraged Finance Team — which oversees US$73bn in high yield and bank loan assets, is based in the U.S., Europe and Asia. It currently manages four Ucits funds in the high yield asset class.
Jonathan Butler said: "As we do not expect the U.S. or Europe to enter recession in the near to medium term, the backdrop for global high yield investing remains favourable. Additionally, global high yield bond spreads are currently attractive, and we expect some tightening over the remainder of the year."
"At the geographic level, the quality on offer in the European high yield market is superior to the US and spreads are wider.
"On a risk-adjusted basis, we believe the European market offers a compelling opportunity today. However, as a smaller market, investors must be aware there is lower liquidity available in European high yield. As for defaults, these have been at record lows in recent years and we do expect this to pick up as the cycle continues. Therefore, active management is going to be increasingly important from here."
The fund was seeded with $25m on 10 September and will be registered for sale in the UK, Germany, Switzerland and Austria.