High Yield - Managing Rising Rates Through Short Dated High Yield

In our view, there is enormous value in having the exibility to take a global approach to high yield investing. For short-dated high yield funds, we believe that too many funds are constrained to investing in Europe only, which, as a result of increasing index duration, has become more sensitive to interest rates. Historically low yields have led to increasing volumes of issuance with coupons in the 2-3% range, which we view as having
little chance of being redeemed before maturity. These issues are now a significant proportion of European high yield bond indices. We believe that the following strategies will allow investors to protect themselves against rising interest rates: