Select US High Yield Bond Strategy

Select BB-B High Yield Strategy

The Nomura Select US High Yield Bond Fund was launched in response to demand from our institutional investors for a more conservative, higher quality focussed investment strategy. This fund is part of our BB-B High Yield strategy, which has been managed by our affiliate Nomura Corporate Research and Asset Management Inc. (NCRAM), since 1995.

It shares the same underlying philosophy of our well established, and top performing US high yield bond strategy which recently celebrated its 25th anniversary.

NCRAM’s BB-B High Yield strategy and the Select US High Yield Bond Fund focus on the higher rated segment of the sub investment grade universe, with a minimum credit rating of B3/B-.

It aims to deliver outperformance above outperform the Bank of America Merrill Lynch US High Yield, Cash Pay, Constrained B/BB Index of by at least 1% (gross of fees) per annum.

Our Specialist Credit Research Investment Boutique

NCRAM was established in 1991 and is an analyst-driven investment boutique that specialises in below investment-grade credit.

The strategy is led by NCRAM’s Amy Yu Chang, CFA and supported by 12 credit analysts.  The team is focused on taking a total return, bottom-up approach, complemented by a top-down view based on criteria including default rate expectations, monetary and fiscal policy, and overall health of the capital markets.

The “Strong Horse” philosophy

We believe a total return approach driven by credit research is the best way to generate alpha in high yield. We describe our investment philosophy as the “Strong Horse” approach. Strong Horse companies can carry their debt load through good times and bad. These companies generally have a positive ability to de-lever their balance sheet by generating strong, positive cash flows that are sustainable. The creditworthiness of these companies tends to increase over time, as will their credit ratings.

Our Investment Approach

Our process differentiates us through the following points:

• Creative idea generation in an open environment
• Thorough research conducted by experienced credit analysts
• Disciplined portfolio construction based on the best risk and reward opportunities
• Focus on lower-risk high yield securities, with a minimum credit rating of B3/B-

Our approach is primarily bottom-up, though top-down perspectives are incorporated. We also characterise our process as a fundamental, as opposed to quantitative, approach.

Pooled Fund Availability

The Nomura Select US High Yield strategy is available for investment via our Dublin-based Irish domiciled UCITS fund and also via segregated mandates

We would be pleased to provide you with further details of our market forecasts and analysis as well as what sets Nomura apart in this asset class.