Barings, an international investment management firm has launched the Barings Global High Yield Bond Fund as well as the Barings Global Senior Secured Bond Fund which provides retail investors exposure to high-yield investment solutions.
The Barings Global High Yield Bond fund invests in high yield fixed and floating rate corporate debt instruments, mainly listed in North America and Europe. Barings believes the attraction of this fund is that “compared to an equity-like asset class, high yield bonds have the potential to offer comparable returns with lower volatility.”
The Barings Global Senior Secured Bond Fund, is the first of its kind in the Hong Kong retail market according to the firm. Senior secured high yield bonds “are more senior in the capital structure than traditional high yield instruments, meaning bondholders are positioned higher during the restructuring process.” Also the company believes as the asset class is backed by issuer collateral it may have a higher recovery rate of principal invested relative to unsecured high yield bonds. In essence, in the event of a default investors are more likely to recover their money.
Before launching the two funds, Barings has been adding resources to its Asia Pacific team as part of its long-term growth strategy. Mandy Lui has been appointed to the position of head of wealth/ retail distribution, greater China and Southeast Asia. Also Duncan Robertson, to global head of distribution and marketing assumed an expanded role as head of Asia Pacific in August 2018.
Martin Horne, head of the global high yield investment group at Barings said: “This asset class has proven itself over multiple cycle events in the last decade. As we move through the last stages of the current credit cycle with spreads across the board becoming increasingly attractive, strong fundamental credit underwriting will become increasingly valuable to managers who’ve focused on selecting positions based on principal preservation. The launch of these two new funds offers great opportunities to investors of different levels of risk appetite.”
Barings’ high yield team has more than 70 investment professionals across the US and Europe and uses bottom-up analysis, it has over $300 billion in assets under management.
