I really hate that this is categorized as a high yield bond fund, because it really understates the quality of the fund, its management, and its risk reward profile. In reality, it is more of an opportunistic go anywhere bond fund that invests across multiple fixed income sectors such as global government bonds, investment grade bonds, high yield, and emerging market debt.
In addition, the managers will tactically manage the currency exposure and try to generate additional return from that. Their investment process starts with at top down macro analysis that is used to set the sector mix. Once set, they then use a more fundamental approach to security selection.
The average credit quality of the fund must be at least investment grade, however, the high yield exposure will typically be in the 30% to 50% range. At the end of June, 37% was invested in non-investment grade debt.
Performance has been decent, gaining an annualized 5.3% for the past three years, handily outpacing the average global bond fund. Volatility, even with the currency trading has been well below average. What is particularly attractive is that it has shown very low levels of correlation to the traditional asset classes, including Canadian fixed income. This makes it a great way to help reduce the overall volatility of your portfolio by including it as a portion of your fixed income allocation. It is a touch pricey with its 2.07% MER. It also has the potential to be more volatile than a more traditional bond fund. Still, it is my view that over the long-term, the benefits outweigh the risks.