Capital Group Global High Income Opportunities Hedged (AU) aims to achieve over the long-term, a high level of total return, of which a large component is current income by investing in emerging market government bonds and corporate high yield bonds from around the world, while limiting exposure to currencies other than A$ through passive hedging. To achieve over the long term, a high level of total return, of which a large component is current income by investing in emerging market government bonds and corporate high yield bonds from around the world, while limiting exposure to currencies other than A$ through passive hedging.
• For the three months ended 31 December 2022, Capital Group Global High Income Opportunities Hedged (AU) returned 6.3%4 before fees, while the index returned 5.3%. 5 Net of fees, the fund returned 6.1%. 6 Over a one-year period, the fund returned -12.7%4 before fees and -13.4%6 after fees, compared to the index’s return of -13.8%5 .
• All four sectors that GHIO invests in – EM hard currency sovereign bonds, EM local currency sovereign bonds, EM corporate bonds and corporate high-yield (HY) bonds – rebounded to deliver positive total returns in the fourth quarter. This was mostly the result of a fall in bond yields driven by market expectations that inflation might have peaked enabling central banks to ease policy during 2023.
• Within EM local currency sovereign bonds, positions in South Africa and Ukraine were both notable contributors to results. After contracting during Q2, South Africa’s GDP rebounded strongly during Q3.
• The markets positioning for a slowing global economy and less aggressive interest rate hikes fed through to a weakening of the US dollar over the quarter. This in turn helped support hard currency EM. The largest contribution to results was the fund’s holdings in an Argentinian bond. The strong return helping to pare losses from previous quarters. News around the 2023 elections has created volatility in the Argentine bond market and this is likely to remain the case at least until the second quarter of the year when there should be some insight into candidates and coalitions.
• Within corporate HY, all sectors made a positive contribution to fund results. The highest contribution came from the consumer sectors, both cyclical and non-cyclical. Other notable contributions to the portfolios total returns included energy, capital goods and technology
What is Capital Group Global High Inc Opps H Capital Group Global High Inc Opps H is an Managed Funds investment product that is benchmarked against Global High Yield Credit Hdg Index and sits inside the Fixed Income - High Yield Credit Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Capital Group Global High Inc Opps H has Assets Under Management of 37.71 M with a management fee of 0.85%, a performance fee of 0.00% and a buy/sell spread fee of 0%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Capital Group Global High Inc Opps H has returned 1.84% in the last month. The previous three years have returned 0.23% annualised and 9.4% each year since inception, which is when the Capital Group Global High Inc Opps H first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Capital Group Global High Inc Opps H first started, the Sharpe ratio is NA with an annualised volatility of 9.4%. The maximum drawdown of the investment product in the last 12 months is -1.58% and -19.43% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Capital Group Global High Inc Opps H has a 12-month excess return when compared to the Fixed Income - High Yield Credit Index of 2.63% and -3.43% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Capital Group Global High Inc Opps H has produced Alpha over the Fixed Income - High Yield Credit Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Fixed Income - High Yield Credit Index category, you can click here for the Peer Investment Report.
What level of diversification will Capital Group Global High Inc Opps H provide?
Capital Group Global High Inc Opps H has a correlation coefficient of 0.67 and a beta of 2.19 when compared to the Fixed Income - High Yield Credit Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Capital Group Global High Inc Opps H and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Capital Group Global High Inc Opps H with the Global High Yield Credit Hdg Index?
For a full quantitative report on Capital Group Global High Inc Opps H compared to the Global High Yield Credit Hdg Index, you can click here.
Can I sort and compare the Capital Group Global High Inc Opps H to do my own analysis?
To sort and compare the Capital Group Global High Inc Opps H financial metrics, please refer to the table above.
Has the Capital Group Global High Inc Opps H been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Capital Group Global High Inc Opps H?
If you or your self managed super fund would like to invest in the Capital Group Global High Inc Opps H please contact Level 18 56 Pitt Street Sydney NSW 2000 Australia via phone +61 2 8038 0808 or via email -.
How do I get in contact with the Capital Group Global High Inc Opps H?
If you would like to get in contact with the Capital Group Global High Inc Opps H manager, please call +61 2 8038 0808.
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Capital Group Global High Inc Opps H. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - November 30, 2022 For the month ended 30 November 2022, Capital Group Global High Income Opportunities Hedged (AU) returned 4.8%2 , while the index returned 4.2%3 . Net of fees, the fund returned 4.7%4 . For the 12-month period, the fund returned -11.4%2 before fees, and -12.1% after fees4 , compared with the index’s return of -12.7%3 .
• EM bonds had the largest positive impact on the portfolio’s absolute returns over the month. EM hard currency government and agency bonds contributed the most, particularly holdings in Argentina and Egypt. EM local currency nominal government bonds also had a positive impact on absolute returns, led by South Africa and Ukraine, although positions in Russia and Brazil detracted. Holdings of EM corporate bonds added absolute value too, most notably in the basic industry sector where petrochemical company Braskem Idesa was a key contributor. In contrast, EM local currency inflation-linked bonds had little impact on overall absolute results.
• High yield corporate bonds also contributed on an absolute basis. The consumer cyclical sector was the largest contributor on an absolute basis, particularly a holding in Melco Resorts. The consumer non-cyclical sector also contributed to absolute returns, with a position in Teva Pharmaceutical among the largest contributors. While no sectors detracted on an absolute basis, party goods supplier Party City was the largest detractor at a security level.
Performance Commentary - September 30, 2022 • For the three months ended 30 September 2022, Capital Group Global High Income Opportunities Hedged (AU) returned -2.5%4 before fees, while the index returned -2.9%. 5 Net of fees, the fund returned -2.7%. 6 Over a one-year period, the fund returned -17.9%4 before fees and -18.6%6 after fees, compared to the index’s return of -18.5%5 .
• All four sectors that GHIO primarily invests in – EM hard currency sovereign bonds, EM local currency sovereign bonds, EM corporate bonds and corporate high-yield bonds – delivered negative total returns in the third quarter, driving down GHIO’s results. This was mostly driven by the increase in government bond yields as major developed market central banks continued to tighten monetary policy. EM currency weakness weighed on EM local currency debt, against a backdrop of broad US dollar strength over the period.
• Within EM local currency sovereign bonds, positions in South Africa and Colombia detracted. The South African rand weakened over the quarter. The South African Reserve Bank has been proactively raising interest rates, despite relatively contained core inflation, partly to help stem the weakness in the rand.
• Within EM hard currency sovereign and agency bonds, a position in Argentine bonds weighed on the portfolio’s absolute returns. The main sources of volatility remain the election in Argentina next year and the current government’s compliance with the International Monetary Fund programme. Holdings in Mexico also detracted amid high inflation, declining business confidence and softer non-manufacturing PMI. The central bank continued to tighten monetary policy over the quarter and revised its growth projections downwards.
• Both hard and local currency Russian bond holdings were marked higher over the quarter, which had a beneficial impact.
• Within corporate high yield, transportation and communications holdings delivered larger than average negative total returns, which weighed on the portfolio’s total returns. Meanwhile the energy sector had a positive impact.
Performance Commentary - June 30, 2022 For the three months ended 30 June 2022, Capital Group Global High Income Opportunities Hedged (AU) returned -10.0%4 before fees, while the index returned -9.9%. 5 Net of fees, the fund returned -10.2%. 6 Over a one-year period, the fund returned -15.8%4 before fees and -16.5%6 after fees, compared to the index’s return of -16.3%.
Performance Commentary - March 31, 2022 For the three months ended 31 March 2022, Capital Group Global High Income Opportunities Hedged (AU) returned -6.4% before fees, in line with the index return. Net of fees, the fund returned -6.6%. Over a oneyear period, the fund returned -3.4% before fees and -4.2% after fees, compared to the index’s return of -4.3%.
Performance Commentary - August 31, 2021 • For the month ended 31 August 2021, Capital Group Global High Income Opportunities Hedged (AU) returned 0.9%2 while the index returned 0.7%3 Net of fees, the fund returned 0.9%4 For the 12-month period, the fund returned 8.4%2 before fees, and 7.4% after fees4 compared with the index’s return of 6.8%3
• Emerging market (EM) bonds had a beneficial impact on the portfolio’s absolute returns. The main positive contribution came from hard-currency government bonds and agency bonds, particularly Argentina and, to a lesser extent, Mexico; in contrast, Sri Lanka had a negative impact on the portfolio’s absolute returns. EM Localcurrency government bonds also had a beneficial impact on the portfolio’s absolute returns over the month: Indonesia, Colombia, Malaysia and South Africa were the main positives, while Mexico slightly detracted. EM corporate bonds and local-currency inflation-linked bonds both delivered marginally positive absolute contributions.
Performance Commentary - December 31, 2020 For the three months ended 31 December 2020, Capital Group Global High Income Opportunities Hedged (AU) returned 7.5%4 before fees, while the index returned 6.4%.5 Net of fees, the fund returned 7.3%.6 Over a one-year period, the fund returned 8.4%4 before fees and 7.5%6 after fees, compared to the index’s return of 4.0%5.
Areas that helped the portfolio in Q4:
– Mexican local currency and hard currency sovereign bonds Mexican local currency bonds offer relatively high real yields, scope for policy easing, and a well-supported currency. Meanwhile, the hard currency bonds have been supported by an improving external outlook, helped by US fiscal stimulus and hopes for a vaccine.
– Indonesian local currency sovereign bonds The Indonesian rupiah appreciated almost 6% relative to the US dollar over the quarter, helping returns for the local currency bonds. Subdued inflation should continue to provide support to Indonesian local currency bonds.
Areas that hurt the portfolio in Q4:
– Argentine hard currency sovereign bonds Argentina defaulted on its sovereign debt repayments in 2020, resulting in capital outflows. It has also been suffering from double-digit inflation, a weak fiscal position and the impact of the COVID-19 lockdown.
– Frontier Communications (integrated telecom services) The heavily indebted US telecoms group entered Chapter 11 in early 2020, but is widely expected to exit from that early in 2021. The company owns significant fibre assets across the US and our analyst sees potential for growth in that area as well as scope for meaningful de-leveraging.
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