Aberdeen Global High Income Fund

Scorecard
4 / 5 Stars
Lipper
4 4 1 3 1
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
4 / 5 Stars
TheStreet.com
C (Hold)

#23 in High Yield Bond

U.S. News evaluated 174 High Yield Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 9.91 percent over the past year, 7.49 percent over the past three years, and 16.61 percent over the past five years.

Trailing Returns Updated 02.28.2014
Year to date 2.6%
1 Year 9.9%
3 Years (Annualized) 7.5%
5 Years (Annualized) 16.6%
10 Years (Annualized) 8.5%

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Summary

For Artio Global High Yield's management team, a bond's beauty is in the eyes of the beholder.   

As of March 05, 2014, the fund has assets totaling almost $2.76 billion invested in 226 different holdings. Its portfolio consists primarily of junk bonds.  

High-yield bonds--often referred to as junk bonds--are those rated BB or lower. (Ratings agencies like Standard & Poor's, Fitch, and Moody's evaluate the riskiness of bonds--whether issued by governments or corporations--and assign ratings to the individual securities.) High-yield bonds are considered risky because the issuers have a higher probability of defaulting on their debt. Over the past few years, high-yield funds have experienced somewhat of a roller-coaster ride. In 2008, when defaults abounded, the category got hammered. That year, the average fund in Morningstar's high-yield bond category lost upwards of 26 percent. This fund shed 24 percent. Since 2009, though, high-yield bond funds have been undergoing a heated rally. In 2009 and 2010, the fund gained upward of 60 percent over the two years. With interest rates still at historic lows, yield-starved investors have been eyeing junk bonds with increased enthusiasm. 

Still, this is hardly your typical junk bond fund. For starters, as its name implies, it has a global focus, and roughly 16 percent of its bond holdings are invested outside of the United States. Meanwhile, the fund also invests fairly heavily in packages of leveraged loans made by banks. Finally, it's underweight on both the high and low ends of the junk spectrum. That means that its bread-and-butter area is B-rated bonds, which are riskier than BB bonds but still safer than, say, CCC bonds. The fund has returned 9.91 percent over the past year, 7.49 percent over the past three years, and 16.61 percent over the past five years.

Investment Strategy

According to the fund's prospectus: "The Adviser uses a top-down/bottom-up process which brings together insights related to issue, industry, asset class, macroeconomics, maturity and sector. The Adviser seeks to identify stable to improving investment opportunities through an approach which examines the industry in which an issuer operates as well as how that industry is evolving."

Role in Portfolio

Morningstar calls this fund a "supporting player." 

Management

Gregory Hopper manages the fund.

Fees

Aberdeen Global High Income Fund has an expense ratio of 0.99 percent.   

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Risk

In exchange for high yields, the fund risks being stung by defaults.   

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