Global High Yield Credit

A dynamic approach to global high yield

Reasons to invest

Compelling yield

We pursue a high level of income by investing in below-investment-grade corporate bonds.

Global approach

By expanding the universe beyond the two largest high yield markets of the US and Europe, we create more opportunities.

Relative value

Focusing on security selection rather than issuer selection alone, we are able to exploit the differences in relative value among bonds, loans and derivatives.

Risk aware

A thorough risk management process provides the best opportunity to avoid negative credit events and to convert valuation anomalies into alpha.

ESG integration

The team utilises external and proprietary ESG data and research – along with Federated Hermes’ leading stewardship resources – to mitigate risk and discover new opportunities.

Strategy overview

Fraser Lundie

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

Fraser Lundie, CFA
- Head of Fixed Income - Public Markets

Why Global High Yield Credit?

Lower volatility credit can potentially offer superior risk-adjusted returns against equities. Although high economic growth is desirable, credit can thrive in a low-growth environment – given companies’ focus on balance sheet health – leading to excellent fundamentals and low default rates.

Investors continue to search for income. In the current environment, there are many expensive valuations and negative-yielding assets. Therefore, approaching credit in the right way is more important than ever. Through our global, relative value approach, we aim to achieve a high level of income.

The global high yield market can provide compelling diversification as part of a broader portfolio of assets, given its low correlation to equities.

How we invest

Top-down assessment
Bottom-up credit selection
ESG analysis

Investment Philosophy

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

Investment process

Global Equity ESG - Infographic

Team

1639, 1601, 1559
Nachu Chockalingam, CFA

Senior Credit Portfolio Manager, Federated Hermes Limited

Vincent Benguigui
Vincent Benguigui

Senior Credit Portfolio Manager, Federated Hermes Limited

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Insights

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