Investment Objective

The European High Yield Bonds Strategy seeks to maximize excess returns versus the ICE BofAML Euro HY ex Finance 2% Constrained Index over the long term.¹

Investment Philosophy

The team’s research approach is fundamental, bottom-up driven, approach to subsector and security selection.

The team intensively researches the market, with an emphasis on avoiding defaults.

We believe that actively managed high yield bond portfolios, constructed from the bottom up using methodical, research-based subsector and security selection, can lead to consistent outperformance versus the broad high yield index with a high information ratio.

PGIM attempts to achieve this through well-diversified portfolios of performing credits that are carefully researched.

Intensive fundamental research is conducted by a large and experienced internal credit research staff to identify strong and improving credits.

The size and experience of the research organization permit us to apply intense focus on individual securities identified from a broad pool of investment opportunities.

Portfolios are then actively managed to capture the best opportunities and minimize credit losses, within an environment of disciplined risk management oversight.

PGIM does not take extremely large positions, either on an absolute basis or relative to benchmarks, in any single issuer or industry as a primary means to achieve outperformance.

We do not hold a significant portion of the portfolio in an asset class other than US and European high yield bonds, such as common stocks or emerging markets.