Aviva Investors - Global Unconstrained Credit Fund Amh EUR Inc
Fund overview
Objective: To generate capital growth and provide income over the long term (5 years or more).
Investment Strategy: The Sub-Fund will adopt a highly flexible unconstrained investment approach, allowing the Investment Manager to invest across the fixed income universe, actively allocating across sectors, geographies (including emerging markets) and credit qualities based on market conditions. There shall be no constraints on the rating of the securities and therefore the Sub-Fund may invest in high yield securities.
Specifically, at all times, the Sub-Fund invests at least 80% of total net assets (excluding ancillary liquid assets, eligible deposits, money market instruments and money market funds) in fixed income assets. The unconstrained investment approach means that the Sub-Fund may hold investment-grade as well as non-investment grade corporate bonds, government bonds, quasi-government bonds, supranational bonds, emerging market debt, hybrid bonds, preferred stocks and securitised debt instruments.
The Sub-Fund may invest up to 20% of total net assets in securitisation, including asset-backed securities (ABS), mortgage-backed securities (MBS) which may be secured on residential, consumer or corporate loans, among other asset types, and collateralised loan obligations (CLOs). Within this 20% limit, investment in CLOs shall not exceed 10% of the Sub-Fund’s total net assets. A maximum of 2.5% of the Sub-Fund’s net assets can be allocated to CLOs with a credit rating of BB+ and below by Standard and Poor’s and Fitch, or Ba1 and below by Moody’s.
The Sub-Fund may invest a maximum of 50% of total net assets into emerging markets, up to 20% of total net assets (in aggregate) in Additional tier-1 (AT1) and contingent convertible bonds, 20% in perpetual bonds, up to 10% of total net assets in unrated securities and up to 10% of total net assets in distressed securities.
Benchmark (performance comparison): 50% Bloomberg Global Aggregate Corporate Total Return Index hedged USD & 50% Bloomberg Global High Yield Total Return Index hedged USD (the “Benchmark” or the “Index”)
Fees and expenses
Risks
Asset Backed Securities and Mortgage-Backed Securities Risk: The Fund may invest in asset‑backed securities, whose value depends on the performance of the underlying loans or receivables. Changes in interest rates, early or late repayments, or complex payment structures can reduce or delay returns. In stressed market conditions, asset‑backed securities can become less liquid and more difficult to value or sell.
Collateralised Loan Obligations:In addition to standard debt and ABS risks (e.g., interest rate, credit and default risk), CDOs and CLOs involve further risks, including: (i) collateral cash flows may be insufficient to meet interest or other payments; (ii) collateral may decline in value, be downgraded or default; (iii) a Fund may hold subordinated tranches exposed to higher losses; and (iv) their complex structures can be hard to fully assess, creating valuation challenges, potential disputes with issuers, or unexpected investment outcomes.
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.
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.
Hybrid Securities / Perpetual Securities: Hybrid or subordinated debt is subject to specific risks of non-payment of coupons and loss of capital under certain circumstances. For non-financial bonds, hybrid debt is deeply subordinated debt, which implies a low recovery rate in the event of issuer default.
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.
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.
Emerging Markets Risk: 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.
Credit Risk: A bond or money market security could lose value if the issuer's financial health weakens.
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.
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.
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.
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.
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 sub fund. 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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