Corporate Hybrid Bonds are a growing, under-invested asset class, offering attractive, high yield-like income and total return potential from investment grade issuers. The fund is actively managed by industry veteran Julian Marks, a pioneer in institutional investment in Corporate Hybrid Bonds.
Attractive, high-yield-like income and total return levels from strong, investment grade credits
Why are corporate hybrids attractive?
Corporate hybrids offer HY-type coupons from IG issuers, are index-eligible and at $400bn, the market size is significant, yet it’s misunderstood
How do they fit into portfolios?
Investment grade quality, yields above CoCos and matching High Yield, with less risk; a compelling investment grade overweight or high yield complement
SFDR* Classification: Article 8.
Corporate hybrid bonds are more volatile than senior bonds of the same issuers. However, credit default risk is the primary concern, which is partly mitigated by the strength of the issuers and is limited further through our security selection process. Corporate Hybrids are frequently confused with contingent convertible (CoCo) bonds, which are issued by banks, but feature none of the write-down clauses or regulatory concerns of that bond type. Currency risk is hedged to within small tolerances.
Sustainability information from investee companies and third-party data providers may be incomplete, inaccurate or unavailable. As a result, there is a risk that we may incorrectly assess a security or issuer, resulting in the incorrect inclusion or exclusion of a security in the portfolio.
* EU Sustainable Finance Disclosure Regulation.
Further details of the sustainability strategy are described in “Sustainability-related disclosure.”
Achieve an attractive level of total return (income plus capital appreciation) through investment primarily in corporate hybrid bonds.
Nomura Asset Management offers an array of investment strategies, including many within the equity and fixed income asset classes.
Authored by Julian Marks, CFA, this publication includes key characteristics and risk profile of corporate hybrids.
Nomura Asset Management offers an array of investment strategies, including many within the equity and fixed income asset classes.
Corporate hybrid bonds are more volatile than senior bonds of the same issuers. However, credit default risk is the primary concern, which is partly mitigated by the strength of the issuers and is limited further through our security selection process. Corporate Hybrids are frequently confused with contingent convertible (Coco) bonds, which are issued by banks, but feature none of the write-down clauses or regulatory concerns of that bond type. Currency risk is hedged to within small tolerances.
Sustainability information from investee companies and third-party data providers may be incomplete, inaccurate or unavailable. As a result, there is a risk that we may incorrectly assess a security or issuer, resulting in the incorrect inclusion or exclusion of a security in the portfolio.
Nomura Funds Ireland plc is an open-ended investment company with variable capital, incorporated in Ireland on 13th April, 2006 under the Act with registration number 418598. The Fund has been authorised by the Central Bank as an UCITS pursuant to the UCITS Regulations. The Fund is structured as an umbrella fund consisting of different Sub-Funds each comprising one or more Classes. The Fund has segregated liability between each of its Sub-Funds.
Full information on the presented funds, which is relevant for an investment decision, can be found in the fund´s most recent sales prospectus, key information document (PRIIPs KID), key investor information document (UCITS KIID) – as appropriate for your relevant jurisdiction – and annual and semi-annual reports. The UCITS KIIDs are available in English and, for the PRIIPs KIDs, in the official language of the countries in which the fund is registered for distribution. Performance in the past is no guarantee of future success. There can be no guarantee that the fund´s investment objective will actually be achieved.
A summary of investor rights in English and information on collective redress mechanisms are available at https://www.nomura-asset.co.uk/download/funds/how-to-invest/Summary_of_investor_rights.pdf. Nomura Asset Management U.K. Limited may at any time decide to terminate arrangements it may have made for the marketing of units of a fund in a member state other than its home member state.