Search this website. You can use fund codes to locate specific funds

GLOBAL HIGH YIELD CREDIT

A dynamic approach to global high yield credit

Image

Investing worldwide, we exploit differences in relative value throughout issuers’ capital structures aiming to outperform through the cycle.

Fraser Lundie

Head of Credit

Investing worldwide

A global approach to exploit the globalisation of the global high yield credit market.

Across the capital structure

By searching the capital structures of issuers for securities, we seek bonds and derivatives with superior relative value.

Selecting securities, not just issuers

Identifying outperforming securities is more important than picking issuers that simply pay back.

Experienced team

A skilled, integrated team whose principal members have worked together since 2004.

Presenting the Federated Hermes Global High Yield Credit Fund

Take a look at the portfolio from five angles to see what makes it different to its peers and why the asset class may be of appeal to investors, both in the short and long-term.

Investment approach

We believe that global, relative-value investing throughout the capital structures of issuers can deliver strong returns through the cycle.

Through top-down analysis, we determine our risk appetite and the return prospects of different regions and sectors. These findings direct our disciplined, bottom-up research, in which we seek exposure to issuers with attractive credit risks and aim to determine which securities in their capital structures provide superior relative value.

Our global approach, in which we invest throughout the US, Europe and the emerging markets, provides us with access to an expansive set of opportunities and sources of liquidity.

Investment process

We believe that global, relative-value investing throughout the capital structures of issuers can deliver strong returns through the cycle.

This requires a broad mandate. By investing worldwide, we are exposed to more opportunities to exploit differences in valuation and potential return, and can better manage liquidity risk. Our top-down analysis assesses the return prospects of different regions and sectors, and informs our bottom-up research of companies. We aim to identify attractive issuers and, crucially, determine which bonds and credit-default swaps in their capital structures provide superior relative value.

Giving credit to ESG analysis

We historically assessed companies’ environmental, social and governance (ESG) risk alongside core operating and financial risks. Now we are furthering this analysis by using a proprietary pricing model to capture the influence of ESG factors on credit spreads. It shows the correlations between an issuer’s QESG Score – developed using best-of breed external research and insights from the engagement specialists in EOS – and their credit-default-swap spread. This enables us to calculate the marginal price of the ESG risk for each issuer, and anticipate changes in valuation. It is an informative analytical tool, enabling us to avoid issuers with tight spreads and low QESG Scores and favour those with wide spreads and high QESG Scores.

Celebrating 10 years of the Federated Hermes Global High Yield Credit Fund

To celebrate the 10-year anniversary of the Hermes Global High Yield Credit Fund, Fraser Lundie, Head of Credit, takes a look at how the debt market has evolved over the last decade, how this has influenced the fund’s process and what part ESG considerations have to play.

Team

No posts matching your criteria

Related Insights

Global High Yield celebrates its 10-year anniversary
Our Global High Yield capability is 10 years old. Since its inception a decade ago, the global high-yield market has transformed beyond recognition.
Recalibrating the rulebook: 360°, Q2 2020
Even in the eye of the storm, we remain optimistic about the opportunity to seek out idiosyncratic stories in credit markets
When coupons are king: the case for global high-yield credit
The market rout means that high yield is currently trading at attractive valuations

Sales Contacts

Paul Voute,
Head of European Business Development
Nexo Capital,
Hermes' French Representative