European Currencies High Yield Bond Strategy
European Currencies High Yield Bond Strategy

European Currencies High Yield Bond Strategy

 
 
 
Summary

The European Currencies High Yield Bond Strategy is a value-oriented fixed income strategy that seeks attractive returns through investing in a diversified portfolio of primarily high yielding fixed income securities. The team invests primarily in euro-denominated debt issued by corporations that offer a yield above that generally available on Investment-Grade debt securities. To help achieve its objective, the strategy combines a top-down macroeconomic assessment, to determine optimal beta positioning for the portfolio, with rigorous bottom-up fundamental analysis.

+/-10%
Benchmark Security Weight
<5%
Single Issuer
75-90
Typical Number of Holdings
 
 
Investment Approach
Philosophy

The investment team believes there is a broad scope for fixed income market participants to mis-value a company’s default risk, resulting in bond prices failing to reflect what, in the team’s view, is the true credit profile of a company. However, over time, the team believes that the market will recognize the high-quality of the issuer, and re-price the securities accordingly, thereby offering investors a potential opportunity for superior relative returns over the long term. 

The team believes that successful credit management depends on four factors: a value-driven process, forward looking credit analysis, careful control of overall portfolio risk through broad diversification and a global approach to investing. In the High Yield space, the team believes that securities should be evaluated for their total return over the entire market cycle, and not just yield generation. This belief often leads the team to invest in the upper tiers of the High Yield market, and even Investment Grade securities when it believes that their return potential exceeds that of lower rated securities.

 
Differentiators
Total return orientation

Rather than focusing primarily on yield generation, the team evaluates securities based on their total potential return.

Extensive Experience

Morgan Stanley Investment Management has managed high yield bond strategies, as a separate asset class, since 1989 and throughout a variety of volatile markets conditions.  

Global Resources

An emphasis on a team-based approach to investment and research, allows investors to benefit from the combined insight and expertise of the Global Fixed Income Team. These global resources enhance the team’s ability to manage high yield.

 
 
 
Investment Process
1
Macro analysis

The team begins with an assessment on the optimal beta positioning for the portfolio based on valuations and a top-down macroeconomic analysis.

2
Fundamental Screening

The team applies what they believe to be a unique combination of quantitative and qualitative filters to identify approximately 150 to 170 bond issuers that meet the team’s investment criteria in terms of competitive position, franchise value and management quality. 

3
Credit Analysis

The team conduct rigorous credit analysis that primarily focuses on financial risk, business risk and management ability/intentions. 

4
Valuation Analysis

The team’s credit analysis narrows the universe to approximately 125 investment candidates on which a relative valuation assessment is conducted. The team seeks the most undervalued securities that will provide the best risk-adjusted total return, and focus on cash-flow generation, leverage, asset values, earnings stability and management quality to determine an overall risk assessment, which is then compared to the spread at which the company’s bonds trade to determine value.

5
Portfolio Construction

A portfolio of 75 to 90 securities is constructed, with sector allocation driven primarily from bottom-up security selection (subject to our risk management guidelines).

 
 
Portfolio Managers
Managing Director
22 years industry experience
Vice President
9 years industry experience
 
 
Insights
Global Fixed Income Bulletin
A Bumpy Ride
Jun 15, 2018
The Global Fixed Income team discusses how May was a schizophrenic month for financial markets, with both bouts of "risk on" and "risk off", and how they expect the high volatility to continue.
Global Fixed Income Bulletin
Ranges Are Meant to be Broken
May 11, 2018
The Global Fixed Income team discusses how we may have seen markets settle in a range in April, but that new economic data (better or worse) could force the market to change its expectations.
 
 
 
 

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リスクについて

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受託資産の運用に係る費用について

投資顧問契約及び投資一任契約に係る投資顧問報酬として、契約資産額に対して年率2.16%(税込)を上限とする料率を乗じた金額が契約期間に応じてかかります。投資一任契約に基づいて投資信託を組み入れる場合は、投資する投資信託に係る費用等が投資顧問報酬に加えてかかる場合があります。また、一部の戦略では投資顧問報酬に加えて成功報酬がかかる場合があります。その他の費用として、組み入れ有価証券の売買手数料、先物・オプション取引に要する費用、有価証券の保管費用等を間接的にご負担頂いただく場合があります。これらの手数料等は契約内容、契約資産の額、運用状況等により異なる為、事前に料率、上限額等を示すことができません。

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