Threadneedle High Yield Bond C1

Invests primarily in pan European high yield corporate bonds. Euro exposure is hedged to sterling.

  • 41.37p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 3.75% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.25%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.42%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 4.00%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 18 September 2020, fund data last updated 08 October 2012

The fund aims to achieve a higher level of income by investing principally in higher risk corporate bonds issued by European (including UK) companies. These will generally be denominated in sterling and euros, though other currencies may be included. The principal driver of fund construction is company specific credit analysis, followed by a top-down industry overlay. The portfolio is similar to that of Threadneedle's European High Yield fund, but all non sterling exposure is hedged back to sterling. Bonds issued by major governments and companies will be more stable than those issued by emerging markets or smaller corporate issuers; in the event of an issuer experiencing financial difficulty, there may be a risk to some or all of the capital invested. Any historical or current yields quoted should not be considered reliable indicators of future performance.

Fund summary

Sector £ High Yield
Structure OEIC
Launched October, 1999
Size £948m
Yield 4.00%
Charging basis Capital
Dividends paid 4th day of each month

Charges

Standard initial charge 3.75%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.25%
Ongoing charges figure 1.42%

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Investment process

A plain vanilla high yield corporate bond fund, investing mainly in euro and sterling denominated issues, although other currencies can be included. Quasi equity securities are not considered. The essential driver of fund performance is bottom up credit analysis, which includes covenant structure, company valuation, financial analysis and business analysis. Credit analysis is subsequently combined with a top-down sector/industry overlay to finalise the company specific credit opinion. This work enables the team to assess relative value and is combined with portfolio risk management to determine the final stock selection. The reference benchmark is the Merrill Lynch European High Yield ex Subordinated Financials, 3% constrained, hedged into sterling.

Manager research

Average monthly relative returns

  • 15/16 -0.21%
  • 16/17 -0.13%
  • 17/18 0.15%
  • 18/19 0.05%
  • 19/20 -0.04%

Bestinvest MRI

  • 3 years 0.05%
  • 5 years -0.04%
  • Career 0.02%
  • 3 years 78.50%
  • 5 years 58.30%
  • Career 85.50%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Barrie Whitman

A 1982 Economics & Accounting graduate of Hull University, Whitman qualified as a chartered accountant in 1986. He began his investment career when he joined the United Bank of Kuwait in 1987 as a credit analyst, becoming a high yield manager in 1990 and head of high yield in 1996. He moved to Standard Bank in 1997 to head their European high yield operation before joining Threadneedle in 1999, where he established and heads up their high yield team.

Track record

Barrie Whitman has 20.8 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.02%. During the worst period of relative performance (from January 2002 - March 2010) there was a decline of 21% relative to the index. The worst absolute loss has been 31%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 86%.

Periods of worst performance

Absolute -31.00% (May 2007 - December 2008)
Relative -21.00% (January 2002 - March 2010)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 31 May 2020

2.9% Telefonica Europe Bv
2.6% Netflix Inc
2.6% Petroleos Mexicanos
2.2% Telecom Italia Spa(New)
2% Vodafone Group
1.9% Iqvia Hldgs Inc
1.7% Casino Guichard-Perrachon
1.6% Teva Pharmaceutical Finance Netherlands Ii B.v
1.6% Thyssenkrupp Ag
1.4% Gnma2 30yr Tba(Reg C) 3 05/23/2016
Source: Trustnet

Sector breakdown

Short dated bonds 47.00%
Medium dated bonds 26.00%
Very short dated bonds 21.00%
Money market 3.00%
Cash & Cash Equivalents 2.00%

Portfolio

120-150 bonds from 75-100 issuers.

Constraints

Max 6% in one issuer. Each ratings bucket (BB, B etc) must be within +/-10% of benchmark. Duration +/-25% of benchmark. CCC rated paper is unlikely to exceed 10% and is more commonly around 5% of the portfolio. Max 10% investment grade debt.

Key Investor Information

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