U.S. High Yield | Capital Group

TOTAL RETURN FIXED INCOME

U.S. High Yield

Vehicle Collective Investment Trust, Separate Account

Overview

Objective: Seeks high total return, with a large current income component, by investing in high-yield securities. 

  • Strategy inception date: 1984
  • Assets in strategy (billions): $18.2
  • Benchmark: Bloomberg Barclays U.S. Corporate High-Yield Index, 2% Issuer Cap
  • Maximum below-investment-grade bonds (%): 100
  • Currency (%):
    • USD allocation: 100
  • Invests in:
    • U.S. corporate bonds
    • May own non-U.S. high-yield corporate debt, investment-grade corporate debt, convertible securities, high-yield preferred stock and bank loans.
  • Minimum account size (millions):
    • Collective investment trust: $5
    • Separate account: $100

Assets in strategy as of June 30, 2018.

For a DC collective investment trust, plan size of $250 million may be used to satisfy the minimum account size requirement.


Approach
  • Research is the cornerstone of Capital’s investment process, which integrates macroeconomic, fixed income and equity analysis from all regions of the globe
  • Our fixed income analysts leverage our integrated approach, drawing on the work of their counterparts in our equity research group. Bond analysts typically specialize in one or more industries and/or sectors, which cover the full quality spectrum from investment-grade to high yield
  • A strategic group is also dedicated to currencies, asset allocation, quantitative research, politics, and other macro issues
  • The portfolio manager looks for companies with improving credit outlooks as well as companies with good credit fundamentals that the market may be undervaluing. After an issuer has been identified, the portfolio manager then determines the best risk-adjusted value in its capital structure
  • The research analysts are assigned a portion of the portfolio to manage, with each analyst responsible for securities within his or her industry coverage. Analysts look both at the creditworthiness and the relative value of securities within the marketplace
  • The portfolio manager works closely with Capital’s traders, who provide valuable information about market anomalies, inefficiencies and deal flow in addition to executing trades
  • Capital's research process is our best risk control
    • The Capital System℠ naturally creates diversification within the portfolio
    • Our independent global investment control group monitors compliance with portfolio guidelines
    • Our legal and compliance team helps make certain we adhere to regulations in the markets in which we invest

History of Fixed Income at Capital Group

We began managing fixed income assets for institutional clients in 1973, and Capital Fixed Income Investors had $321.4 billion in assets under management as of June 30, 2018. Capital began managing high-yield bonds in 1984.

 


Portfolio Management Team

 


Resources


Fund Characteristics

Defined Benefit Plans (PDF)

Defined Contribution Plans (PDF)

Endowments/Foundations (PDF)

 


Additional Reports

Annual Report (PDF)

 


Profile

U.S. High Yield Profile (PDF)

 

 


The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

Any collective investment trusts (“CITs”) available under this strategy are maintained by Capital Bank and Trust Company (“trustee”), which has retained an affiliate to serve as investment adviser to the trustee for the CITs.

 


Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing.