Fund Objective

To achieve a yield in excess of that available through investment in a traditional corporate bond fund and to pursue a policy of active management through a diversified portfolio and rigorous stock selection to control the impact of credit risks on capital values.

View on Past Performance

The high yield market returned 0.9% in August, helped by a rebound in global financial markets, a positive reaction to the decline in oil prices and general resilience in the US economy. European high yield companies reported results, which on balance, met expectations. However, the outlook for cyclical companies continues to deteriorate due to the slowing European economy. The fund returned 0.6% over the period which was behind its sector average.In particular, chemical companies underperformed on the deteriorating prospect for growth in Europe.

Future Expectations

Given the uncertainty over the oil price, a weak housing market and inflationary pressures within the global economy, we are cautious on the short term outlook. The fund continues to run a well diversified portfolio with a preference for exposure to cable and telecom companies over more economically sensitive sectors. We will continue to improve the credit quality within the portfolio given the uncertain outlook for global markets.

Fund Details