27th January 2011

Schroders launches emerging market high income bond fund

Schroders is pleased to announce the launch of Schroder ISF Global High Income Bond, which aims to provide investors with a high level of income through investing in a blend of emerging market sovereigns, corporates and developed market high yield bonds.

Warren Hyland, a global bond fund manager at Schroders, will coordinate management of the fund and will aim to achieve the high income objective by actively allocating assets between the three broad high yield fixed income sectors as well as using active currency management. Warren will be supported by Schroders’ fixed income team, including a global network of 25 credit analysts and 30 specialised portfolio managers.

Emerging market corporate bonds have become a significant and popular asset class driven by lower levels of leverage compared to the developed world, attractive valuations, strong growth stories and improved risk appetite. Furthermore, an improving economic backdrop, solid credit fundamentals and strong demand also points to a continued positive outlook for high yield credit this year.

Karl Dasher, Global Head of Fixed Income, commented:
“As the credit market recovery that began in 2009 matures with interest rates near historic lows, investors are increasingly looking for a risk controlled way of generating high income. We believe a disciplined, multi-strategy approach is the most prudent answer. This fund combines the expertise of more than two dozen credit research professionals in Asia, Europe and the Americas; specialist high yield credit portfolio managers experienced in navigating credit cycles; and emerging market specialists who understand the investment terrain within those markets.”

Warren Hyland, Fund Manager of Schroder ISF Global High Income Bond, also commented:
“Our goal is to offer investors a high income outcome together with diversification benefits while minimizing any permanent loss of capital. This is an important factor as all markets could be subject to periods of volatility as a result of the European sovereign credit problems and policy actions in China that could impact global growth. However, we use a well defined and robust investment process of quantitative and qualitative analysis, which allows us to allocate capital to sectors we believe will outperform while acting within a risk-controlled framework.”

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