INFORMATION FOR INVESTMENT PROFESSIONALS
THREADNEEDLE
HIGH YIELD BOND FUND
Fund objective and investment policy
Barrie Whitman
Fund Manager and Head of
High Yield Credit, EMEA
David Backhouse
The aim of the Fund is to provide income. The Fund invests
at least two-thirds of its assets in high income paying bonds
(which are similar to a loan and pay a fixed or variable interest
rate) issued by companies worldwide. High income paying
bonds are bonds that have received lower ratings from
international agencies that provide such ratings. These bonds
are considered riskier than higher rated bonds but typically pay
a higher income. The Fund makes active investment decisions.
Fund Manager
Key reasons to invest
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Access to non-investment grade, fixed interest securities denominated or hedged into GBP – The Fund
aims to deliver returns throughout the credit cycle from coupon income whilst also aiming to identify bonds
that have the potential to increase in price
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Bottom-up stock pickers – We thoroughly examine company accounts, balance sheets and profit and loss
statements with the aim of identifying undervalued companies and, most importantly, avoiding those that
may default
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Global perspective – Our investment professionals based in North America, Europe and Asia share their
insights across asset classes and geographies, generating a richer perspective on global, regional and local
investment landscapes
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People – Fund manager and Head of High Yield Credit, EMEA, Barrie Whitman has 29 years’ investment
experience specifically in high yield and investment grade credit
Key facts
Launch date:
October 1999
Fund size:
£926.8m
Index:
ML Euro Currency High Yield
Constrained x Sub Fin (£ Hedged)
Our approach to fixed income
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Our approach considers seven sources of return in fixed income markets
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Analysis using the drivers of fixed income generates ideas in each area
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We construct portfolios to allocate risk wherever we see the best source of performance
Market drivers
Fundamental
Structural
Valuation
Potential sources of return for fixed income funds
Asset class
allocation
Currency
Curve
Duration
Industry sector/
Country
Credit quality
Applicable to high yield
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Stock
selection
The investment process – Columbia Threadneedle’s critical edge
Fundamental company specific research is the backbone of our approach. However, our investment process differs
from our competitors in a number of ways.
A large investment manager
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The High Yield Bond team can draw upon a wealth of investment resource in a broad range of areas.
Asset allocation
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Asset allocation at the rating or sector level.
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We consider whether it should adopt an aggressive or defensive posture.
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Overweight or underweight in lower rated instruments.
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Exposure to cyclical sectors.
Sector allocation
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Importance of sector analysis, particularly in volatile markets when investors tend to avoid sectors deemed to be
risky, regardless of the quality of the companies in those sectors.
Idea generation
Research
Implementation
High Yield Team
Macro
analysis
Fundamentals
and valuation
Columbia Threadneedle Investment Platform
External resources
Micro
analysis
Investment
research
Recommendation
Recommendation
Monitoring
and Review
The
portfolio
Risk
management
Structural
analysis
To find out more visit columbiathreadneedle.co.uk
Key risks
Investment risk: The value of investments can fall as well as rise and investors might not get back the sum originally invested. Currency
risk: Where investments are in assets that are denominated in multiple currencies, or currencies other than your own, changes in exchange
rates may affect the value of the investments. Issuer risk: The fund invests in securities whose value would be significantly affected if the
issuer either refused to pay or was unable to pay or percieved to be unable to pay. Liquidity risk: The fund holds assets which could prove
difficult to sell. The fund may have to lower the selling price, sell other investments or forego more appealing investment opportunities.
Inflation risk: Most bond and cash funds offer limited capital growth potential and an income that is not linked to inflation. Inflation is likely
to affect the value of capital and income over time. Interest rate risk: Changes in interest rates are likely to affect the fund’s value. In
general, as interest rates rise, the price of a fixed rate bond will fall, and vice versa. Derivatives for EPM/hedging: The investment policy
of the Fund allows it to invest in derivatives for the purposes of reducing risk or minimising the cost of transactions. Valuation risk: The
fund’s assets may sometimes be difficult to value objectively and the actual value may not be recognised until assets are sold. Volatility
risk: The fund may exhibit significant price volatility.
Important information: For internal use by Professional and/or Qualified Investors only (not to be used with or passed on to retail clients). Past performance is not a guide to future performance. The value of investments and any
income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Threadneedle Investment Funds ICVC (“TIF”) is an openended investment company structured as an umbrella company, incorporated in England and Wales, authorised and regulated in the UK by the Financial Conduct Authority (FCA) as a UCITS scheme. TIF is registered for public offer in Austria,
Belgium, Finland, France, Germany, Hong Kong, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Switzerland (some sub-funds only) and the UK. Shares in the Funds may not be offered to the public in any other country and this
document must not be issued, circulated or distributed other than in circumstances which do not constitute an offer to the public and are in accordance with applicable local legislation. Income may fluctuate in accordance with market
conditions and taxation arrangements. The difference at any one time between the sale and repurchase price of units in the scheme means that the investment should be viewed as a medium to long term investment. Investments may
be subject to sudden and large falls in value, and the investor could lose the total value of the initial investment. Shares in the Funds may not be offered, sold or delivered directly or indirectly in the United States or to or for the account
or benefit of any “U.S. Person”, as defined in Regulation S under the 1933 Act. This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or
to provide investment advice or services. Please read the Prospectus before investing. Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document, as well as the latest
annual or interim reports and the applicable terms & conditions. Please refer to the `Risk Factors’ section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. The above documents are available in
English, French, German, Portuguese, Italian, Spanish and Dutch (no Dutch Prospectus), Swedish (for the Key Investor Information Document only) and can be obtained free of charge on request from: Columbia Threadneedle Investments
PO Box 10033, Chelmsford, Essex CM99 2AL. The research and analysis included in this document has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon
prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained
from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed. Issued by Threadneedle Investment Services Limited. Registered in England and Wales, Registered No. 3701768, Cannon Place,
78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.
columbiathreadneedle.com
Issued 03.17 | Valid to 09.17 | J26343
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