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Baring High Yield Bond Fund
Why high yield?
The yield environment for fixed income assets remains generally subdued as macroeconomic uncertainty and heightened risk aversion continues to push bond yields in “safe haven” government bond markets to record lows.
One area which continues to display attractive income-generating qualities for yield seeking investors, however, is high yield bonds. Indeed, the yield to maturity, or redemption yield, of the Baring High Yield Bond Fund was running at 4.4% as at the end of January 2013, compared to just 1.9% for benchmark 10-year US government bonds1.
Why now?
We believe, High yield bonds are at the moment one of the few areas of the fixed income universe which continue to generate an attractive level of income for investors. From a valuation perspective, we think the investment case for high yield has become increasingly favourable due to a period of increased risk aversion. In our view, valuations for the asset class continue to price in excessive default rates, which we have not seen and we do not forecast in the coming months. Global high yield default rates remain below the long-term average and we expect this benign environment to persist as firms continue to deleverage and prudently manage balance sheets.
Why Barings?
We have a long history of investing in fixed income markets having launched the Baring International Bond Fund in July 1978. Since then we have extended our range of bond products and as at 31 January 2013 have £7.7 billion2 invested in fixed income.
Our team of fixed income investment managers have an average of 18 years’ experience and follow a disciplined investment process to test our fixed income funds using model economic scenarios which helps us to manage risk.
The Baring High Yield Bond Fund has a long and stable track record and in our opinion, also offers investors an attractive level of income.
Fund prices
| Fund Name | Valued On | Currency | NAV | NAV Change |
|---|---|---|---|---|
| Baring High Yield Bond Fund - Class A EUR Hedged Inc | 07 Jun 2013 | EUR | 10.960 | -0.010 |
| Baring High Yield Bond Fund - Class A GBP Hedged Inc | 07 Jun 2013 | GBP | 7.270 | -0.010 |
| Baring High Yield Bond Fund - Class A EUR Inc | 07 Jun 2013 | EUR | 8.570 | -0.110 |
| Baring High Yield Bond Fund - Class A USD Inc | 07 Jun 2013 | USD | 11.350 | -0.010 |
| Baring High Yield Bond Fund - Class A USD Inc Monthly Dividend | 07 Jun 2013 | USD | 11.200 | -0.020 |
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