Threadneedle European High Yield Bond Fund

The Threadneedle European High Yield Bond Fund, which celebrated its 10 year anniversary in March, has delivered an outstanding performance against its peer group median since its launch in March 2000.  Over this period the fund has delivered first quartile performance and is in fact ranked number one since its launch.  The fund, that is now over €1 Billion in size, invests primarily in sub-investment grade high yield fixed income securities issued by companies domiciled in Europe, or with significant European operations and seeks to maximise performance mainly by way of income generation.

Fund manager Roman Gaiser states that: "After 10yrs the European high yield bond market has come of age in terms of size and diversity.  Launching a dedicated European high yield bond fund was innovative in 2000, but demand for the asset class has increased year after year since then.  Furthermore, the strong performance of the asset class over this period, particularly when compared to other fixed income securities and equities, should confirm the relevance of this asset class to any truly diversified portfolio."

Commenting on the outlook for European high yield Bonds, Gaiser goes on to say: "The outlook for global economic growth remains positive and corporate earnings (particularly in Europe), have been strong.  Such an environment is supportive of the high yield bond market and we believe this constructive backdrop will continue into Q2.  There have been some questions of value in the high yield market and whilst yields have fallen significantly, we believe this reflects a more fairly valued market.  Furthermore, with default rates continuing to fall there is scope for further spread compression in the coming months."