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Capital Group launches US high yield fund in Asia

Capital Group has launched a US High Yield Fund as an income-generating play on global synchronised economic growth.
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The Luxembourg-domiciled Ucits product is registered for sale in Hong Kong and Singapore.

The fund is co-managed by David Daigle and Shannon Ward, who also co-manage the firm’s European and Global High Yield Bond Funds.

The fund invests in US high-yield bonds, with restrictions on non-corporate and emerging market corporate bonds. Its uses a bottom-up investment method for securities and industry selection, according to the statement.

“In the current low interest rate and default rate environment, US high-yield bonds can provide  investors with a healthy consistent income stream,” a spokeswoman for Capital Group told FSA. “This is something that looks attractive during the current period of global synchronised growth.”

“The bottom-up approach can help unearth pockets of value that a top-down or passive approach may miss,” she added.

“It could be a good way to find value in a ‘late cycle’ market environment, while offering downside protection in the event of difficult markets,” she said.

Capital Group uses a risk and quantitative solutions team that serves as consultant to fixed income portfolio managers, FSA reported earlier. It was created after the firm moved to strengthen its risk management process in the wake of the global financial crisis.

 

Part of Mark Allen.