Investment Strategies > European High Yield Bond

European High Yield Bond

Seeks to provide attractive income and risk-adjusted total returns by investing in European high yield securities

Disciplined, Repeatable and Proactive Investment Process: Alpha generated primarily through bottom up credit research to seek the best ideas within European High Yield managed by one of the largest dedicated non-investment grade credit research teams
Aims for Outperformance in Both Up and Down Market: Targets returns both in up and down markets with the aim of producing a steady income profile through the market cycles for investors
Utilises Three Key Sources of Value Generation: Avoidance of credit deterioration, industry and quality rotation and relative value analysis

Available as a UCITS Fund

Simon Matthews

Senior Portfolio Manager

Joe Lind, CFA

Co-Head of U.S. High Yield & Senior Portfolio Manager

Christopher Kocinski, CFA

Co-Head of U.S. High Yield & Senior Portfolio Manager

Key Risks

Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.
Liquidity Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Credit Risk: The risk that bond issuers may fail to meet their interest repayments, or repay debt, resulting in temporary or permanent losses to the portfolio.
Interest Rate Risk: The risk of interest rate movements affecting the value of fixed-rate bonds.
Derivatives Risk: The strategy may use certain types of financial derivative instruments (including certain complex instruments). This may increase the portfolio’s leverage significantly which may cause large variations in the value of investments. Investors should note that the strategy may achieve its investment objective by investing principally in Financial Derivative Instruments (FDI). There are certain investment risks that apply in relation to the use of FDI.
Counterparty Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events.
Currency Risk: Investments in a currency other than the base currency of the portfolio are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment. If the currency of the portfolio is different from your local currency, then you should be aware that due to exchange rate fluctuations the performance may increase or decrease if converted into your local currency.

Overview

Investment Philosophy

We believe inherent volatility in European High Yield markets can provide experienced managers with compelling relative value opportunities. Our team operates a disciplined and repeatable credit process which seeks to provide downside protection with upside participation.

Structured, Research-Driven Investment Process

A process that focuses on identifying relative value and potential tail risk events to generate consistent risk-adjusted alpha.

Team Depth & Experience

Process Led Investing

Integrated Global Platform

ESG Excellence

Over 50 dedicated Non-Investment Grade resources across portfolio management, research and trading
PM and analyst experience average 23 & 12 years, respectively¹
Consistent investment philosophy since 1997

Bottom-up security selection and relative valuation narrowing in on best ideas
Proprietary “Credit Best Practices” governs the process
Focus on competitive yield
Goal is to outperform across all market environments

Collaborate with 190+ fixed income investment professionals
Access to 450+ investment professionals across equity, alternatives, and QMAC²
Insights & opportunities incorporated into portfolio construction

Differentiated and integrated ESG process
Proprietary NB ESG quotients for all holdings
Analysts engage with managements on ESG factors & track progress
NB scored above the median of large investment management peers globally³ for ESG integration in every category by the UN PRI⁴

Client Focused: Customized Solutions Available

Security Selection Process

For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman.

As of March 31, 2024. For illustrative and discussion purposes only.

¹ Employee data as of March 31, 2024.

² Subject to Neuberger Berman’s policies and procedures, including certain information barriers within Neuberger Berman that are designed to prevent the misuse by Neuberger Berman and its personnel of material information regarding issuers of securities that has not been publicly disseminated.

³ Based on the average scores of reporting investment management signatories globally with AUM greater than $50bn.

⁴ PRI grades are based on information reported directly by PRI signatories, of which investment managers totaled 3,123 for 2023. All signatories are eligible to participate and must complete a questionnaire to be included. Please see Additional Disclosures at the end of this material relating to Principles for Responsible Investment (PRI) Scores and PRI 2020 Leaders’ Group. This material is intended as a broad overview of the Portfolio Manager’s style, philosophy and investment process and is subject to change without notice. Portfolio Manager’s views may differ from that of other portfolio managers as well as the views of the firm. Information is intended to be a general overview of the process, is as of the date of this presentation, and is subject to change without notice. See Additional Disclosures at the end of this material, which are an important part of this presentation. Credit quality ratings are based on the ICE BofA Index composite ratings. The ICE BofA composite ratings are updated once a month on the last calendar day of the month based on information available up to and including the third business day prior to the last business day of the month. The ICE BofA composite rating algorithm is based on an average of the ratings of three agencies (to the extent rated). Generally the composite is based on an average of Moody’s, S&P and Fitch. For holdings that are unrated by the ICE BofA Index composite, credit quality ratings are based on S&P’s rating. Holdings that are unrated by S&P may be assigned an equivalent rating by the investment manager. No NRSRO has been involved with the calculation of credit quality and the ratings of underlying portfolio holdings should not be viewed as a rating of the portfolio itself. Portfolio holdings, underlying ratings of holdings and credit quality composition may change materially over time.