Why Fixed Maturity High Yield?

The best of two worlds

The advantage of redemption at par of individual bonds, combined with the diversification benefits of a mutual fund.

Fixed investment period and redemption date

Smaller sums can be invested:
investing in fractions is not possible with individual bonds

Declining default risk as maturity date approaches: better visibility on financial position of issuers

December 2023: sweet spot between sufficient reward and contained duration risk (which is lower in the fund than in the High Yield benchmark)

Why now

01

European core government bonds yield paltry or even negative interest rates. Taking on additional duration risk may not be a wise thing to do when interest rates rise.

02

Default rates of European high yield issuers are set to remain low. Individual high yield bonds may be too difficult to invest in.

03

Ratio of interest coverage has improved significantly in recent years.

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