Aviva Investors - Global Hybrid Bond Fund A USD Acc
Fund overview
Objective:To earn income and increase the value of the Shareholder’s investment over the long term (5 years or more).
Investment Strategy:
The Sub-Fund invests in hybrid bonds from anywhere in the world, including up to 30% in emerging markets. Hybrid bonds have both debt and equity characteristics, they are subordinated bonds, which rank between debt and equity in a company’s capital structure. The Sub-Fund will seek to enhance income through a diversified portfolio of hybrid securities and will seek the most attractive opportunities irrespective of credit rating.
Specifically, at all times the Sub-Fund invests at least 70% of total net assets in hybrid bonds issued by non-financial companies. This may include convertible bonds, contingent convertible bonds, preferred stocks and perpetual bonds.
A minimum of 70% of total net assets will be in developed market issuances and a minimum of 50% of total net assets will be in investment grade issuances.
The Sub-Fund may invest in shares or units of UCITS or other UCIs and may also invest in other Debt and Debt-Related Securities (including subordinated debt) from anywhere in the world.
Benchmark (performance comparison and risk management) ICE BofA Global Hybrid Non-Financial 5% Constrained Index
Sub-Fund Dealing Day Orders to buy, switch and redeem Shares are processed each Business Day.
Fees and expenses
Risks
Contingent convertibles securities
Contingent convertible bonds (CoCos), often classified as Additional Tier 1 (AT1) capital instruments, are high‑yield, high‑risk hybrid securities issued primarily by banks. They automatically convert to equity or are written down when the issuer’s capital deteriorates. This makes them structurally riskier than traditional bonds.
Counterparty risk
The Fund could lose money if an entity with which it does business becomes unwilling or is unable to meet its obligations to the Fund.
Credit
A bond or money market security could lose value if the issuer's financial health weakens.
Currency risk
Changes in currency exchange rates could reduce investment gains or increase investment losses. Exchange rates can change rapidly, significantly and unpredictably.
Derivatives risk
Derivatives are instruments that can be complex and highly volatile, have some degree of unpredictability (especially in unusual market conditions), and can create losses significantly greater than the cost of the derivative itself.
Distressed securities
Securities issued by companies/public bodies undergoing financial pressure due to possible bankruptcy, re-structuration, or other financial turmoil. Changing market conditions may have a greater adverse impact on such securities.
Emerging markets
Compared to developed markets, emerging markets can have greater political instability and limited investor rights and freedoms, and their securities can carry higher equity, market, liquidity, credit and currency risk.
Interest rate
When interest rates rise, bond values generally fall. This risk is generally greater for longer-term bonds and for bonds with higher credit quality.
Leverage
A small price decline on a "leveraged" underlying investment will create a correspondingly larger loss for the Fund. A high overall level of leverage and/or unusual market conditions could create significant losses for the Fund.
Liquidity risk
Certain assets held in the Fund could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.
Convertible bonds
Convertible bonds could earn less income than comparable debt securities and less growth than comparable equity securities, and carry credit, default, equity, interest rate, liquidity and market risks.
Perpetual Bonds
Perpetual bonds are fixed income securities with no maturity date. Under certain market conditions, this may result in additional liquidity risk. Under exceptional market circumstances, the liquidity of perpetual bonds may be limited, which may lead to a negative impact on the sale price, leading to a decrease in performance.
Sustainability Risk
This risk is any environmental social or governance event or condition that could impact the value of investments. The Investment Manager primarily relies on its in-house ESG analysis and climate risk indicators to categorise the potential level of Sustainability risks in each subfund. The level of sustainability risk may fluctuate depending on which investment opportunities the Investment Manager identifies. This means significantly and unpredictably.
Operational risk
Human error or process/system failures, internally or at our service providers, could create losses for the Fund.
Management
Important information
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