Launch of iMGP fund centered on European High Yield investments
## Introducing the iMGP European High Yield Fund: A Promising Investment Opportunity
iM Global Partner, in collaboration with Polen Capital, has unveiled the iMGP European High Yield Fund, a new investment vehicle designed to capitalize on the attractive yields available in the European high yield market. The fund, led by Ben Pakenham, aims to deliver a total return through income and capital appreciation.
## Investing in European High Yield Bonds
The iMGP European High Yield Fund primarily invests in high yield debt securities, with at least 80% of the fund's assets allocated to this asset class. A significant portion of the fund, at least two-thirds, will be invested in bonds rated below Baa3 and denominated in euros. This strategy aims to take advantage of the elevated yields in the European high yield market, particularly in a period of fluctuating interest and inflation rates.
## Risk Management and Performance Expectations
The fund's strategy is designed to manage risk effectively, with the majority of the yield coming from credit risk, which is less influenced by government bond markets. Despite current tight credit spreads, this focus on credit risk offers potential opportunities for longer-term investors. The fund is also less sensitive to interest rate changes due to the shorter duration of high yield bonds.
While specific performance metrics for the newly launched fund are not yet available, the strategy is positioned to benefit from the current market conditions. The starting point yield for high yield in Europe is north of 5%, and the European High Yield market, approximately one-third the size of the US high yield market, offers a diverse range of investment opportunities.
## The Management Team
The iMGP European High Yield Fund is managed by a team led by Ben Pakenham, with Adam Tabor serving as co-portfolio manager and research analysts Andrew Carrie and Julien Martin providing support.
## Structural Details and Sustainable Investing
The iMGP European High Yield Fund is structured as a Luxembourg-domiciled Ucits compatible Sicav. The fund's reference index is the ICE BofA Euro High Yield Constrained Index. Additionally, the fund promotes environmental and social characteristics according to Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
## Geographical Scope and Portfolio Diversification
The fund's geographical definition of 'Europe' includes companies outside of Europe that issue in Europe. The US is the largest non-European market represented, accounting for 9%, with Japan second at 3%. The fund's portfolio holds approximately 70-90 issuers, offering a diverse range of investments across the European high yield market.
Euro denominated share classes of the fund include iMGP European High Yield Fund C EUR and iMGP European High Yield Fund I EUR. The credit quality focus will determine opportunities and sectors for investment.
In conclusion, the iMGP European High Yield Fund presents a promising investment opportunity for those seeking income and appreciation in the European market. The fund's strategy, led by an experienced management team, is designed to capitalize on the relatively stable nature of high yield bonds in fluctuating economic conditions.
The iMGP European High Yield Fund, a new investment opportunity, primarily invests in high yield debt securities for capital appreciation and income (financing, investing). To leverage the elevated yields in the European high yield market, the fund focuses on bonds rated below Baa3 and denominated in euros (regulation). Despite current tight credit spreads, this strategy offers potential opportunities for longer-term investors due to the fund's effective risk management (business, regulation).
