Invesco PIMCO Short-Term High Yield Corporate Bond Index Source UCITS ETF EUR Hedged Accumulation

Issuer: PIMCO

Asset Class: Fixed Income

TER: 60bps

Trading Currency: EUR

Pays Income: False

Listing Date: 18 Dec 2017

Ticker: STEA

ISIN: IE00BD26N851

This actively managed fund targets the U.S. high-yield corporate bond market, aiming to deliver a high level of current income while simultaneously focusing on capital preservation. This dual objective suggests a strategy that seeks to harness the attractive yields of below-investment-grade debt but with a risk-aware methodology, mitigating some of the inherent volatility and credit risk associated with this asset class. The active management framework allows the portfolio managers to dynamically adjust holdings based on their evolving macroeconomic outlook and in-depth, independent credit research, providing flexibility that is absent in passive, index-tracking strategies.

The investment process integrates both a top-down macroeconomic analysis and a bottom-up individual security selection approach. This involves evaluating broad economic trends, interest rate trajectories, and market sentiment to inform overall portfolio positioning. Concurrently, a rigorous credit analysis is performed on individual issuers to identify bonds that offer compelling value and possess strong fundamentals relative to their risk profile. This meticulous process facilitates the construction of a diversified portfolio of high-yield bonds from a wide array of sectors within the U.S. economy.

This product is tailored for investors seeking to enhance the income-generating potential of their portfolios, who are willing to accept a higher degree of credit risk compared to government or investment-grade corporate bonds. By concentrating on the U.S. market, it offers direct exposure to the world's largest and most liquid high-yield bond market. A key feature of this specific share class is its currency-hedging mechanism, which is designed to minimize the impact of exchange rate fluctuations between the U.S. dollar and the investor's home currency, making it a suitable choice for those wishing to neutralize currency risk in their fixed-income allocation.