Fund Rationale: Threadneedle US High Yield Fund

Threadneedle US High Yield Fund (the "Fund")
SGD Hedged Class ASH Accumulation Shares (ISIN: LU0640471321)
Fund Manager Page

Endowus has selected the Fund as it offers a diversified portfolio of US High Yield credits securities, managed by a highly experienced team using a rigorous credit research process and a broad credit coverage.

Key Information

Fund Objective: Aims to provide income with the potential to grow capital over the long term, and looks to outperform the benchmark after charges.

Suitability: Investors who are seeking potential total return through higher income and capital appreciation, are seek diversification in their investments through exposure to the USD-denominated high yield market, can tolerate the high price volatility and lower liquidity associated with lower-rated debt securities, are willing to take on a high level of risk, and have a long-term investment horizon.

* Total Fund-level Fees include fund management fee of 1.25%.
** Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 12 December 2003
Share Class Inception: 23 March 2012
Benchmark: ICE BofA US Cash Pay High Yield Constrained

Fund AUM: SGD 292m
Source: MorningStar as of 26 May 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:

Sector Allocation:

Source: MorningStar as of 30 April 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown.

Selection Criteria

Endowus has selected the Threadneedle US High Yield Fund as it is managed by an experienced Portfolio Management team that is supported by a large team of sector analysts who conduct detailed credit research. The Portfolio Management team consists of 4 senior members, each with decades of investment experience. The Lead Portfolio Manager, Mark Van Holland, has been with one of the Threadneedle legacy firms since 1998 and has been in the industry since 1995. The Portfolio Managers work closely with credit researchers on idea generation and position sizing. There are 12 credit researchers with 16 years of average experience each covering different sectors. We think that the team has good credit coverage and a rigorous credit research process that is independent and proprietary.

The Fund is well-diversified in terms of the number of issues/issuers, and it offers exposure to the full spectrum of the high yield credits. The Fund is allowed to use derivatives to manage duration risk. However, credit risk is purely via the bonds and we like this approach of clean exposure. The Portfolio Managers would impose their top-down views in terms of capital structure, quality allocation and industry allocation during the portfolio construction process.

Investors can consider using this Fund in a barbell approach with high grade bonds on one side and high yield bonds on the other to achieve an optimal mix. It is important to note that investing in a US High Yield fund would subject you to more credit risk concentrated in the US. It is relevant to consider the Fund in diversifying your holdings with allocations to other types of investment, such as global investment grade corporate bonds, government bonds, and equities.


Updated by Endowus: May 2021

** Disclaimer: Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.
The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.