Shinhan Asset Management Launches New Shinhan MAN Global High Yield Fund

Shinhan Asset Management announced on the 15th the launch of the ‘Shinhan MAN Global High Yield Fund.’ The fund was launched in response to a favorable market environment for high yield funds, including expectations of a downward stabilization of interest rates in the U.S. market and a low likelihood of interest burden for high yield companies.

The Shinhan MAN Global High Yield Fund invests indirectly in the MAN GLG High Yield Fund. Since its launch in 2019, the underlying fund has recorded a return of 51.4% (an annual average of 8.7%), showing more than twice the excess performance compared to the global high yield index (22.4%, annual average 4.2%). In particular, the YTW (Yield to Worst), which measures the performance of high yield funds and represents the minimum annualized return an investor can earn if the issuer does not default, is 11.2%, making it a very attractive investment timing.

The MAN GLG High Yield Fund manages a portfolio primarily composed of U.S. and European high yield bonds. Currently, it considers Europe to be more attractive and is managing a higher proportion of European high yield bonds. European high yield bonds offer interest rates that are 1-2% higher than those in the U.S., and by increasing the European allocation, the fund has recorded superior performance compared to competing funds.

The asset manager of the underlying fund is part of the UK-based MAN Group, which has a 200-year history and is a large global asset manager managing approximately KRW 208 trillion as of November 30 last year. The high yield bond specialist team, with an average of over 17 years of management experience, has a strong advantage in individual company investments based on thorough corporate analysis.

Leveraging these strengths, the MAN GLG High Yield Fund achieved a 13.4% return during the COVID-19 period in 2020 by expanding its allocation to undervalued bonds (global high yield index 6.5%). In 2021, during the inflationary period, it outperformed the market by focusing on companies with strong pricing power (such as commodity companies), achieving 11.6% for the fund versus 3.0% for the index. Since 2022, it has continued to deliver excellent performance through a defensively structured portfolio centered on the financial sector.

Jung-ho Park, head of the Fund Solution Team at Shinhan Asset Management, said, “With an expected interest rate cut in the U.S. this year, a global high yield bond fund that offers high income and capital gains is a product that must be included in portfolios now.” He added, “Considering the bond market’s characteristic of pricing in benchmark interest rates in advance, it will be a more effective investment strategy to hold the position rather than waiting for the U.S. interest rate cut.”

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