RBC BlueBay launches UCITS U.S. high-yield bond fund

RBC BlueBay Asset Management has launched the BlueBay U.S. High Yield Bond Fund as a UCITS strategy for investors outside the United States. The fund will be run by Tim Leary, Andrzej Skiba and Charles Whinery and follows the firm’s U.S. high-yield vehicle surpassing $1 billion in assets last year.

The UCITS fund follows the investment approach used in the existing U.S. vehicle, which launched in 2017. The team combines macroeconomic analysis with issuer-level credit research, uses proprietary data and multiple alpha sources, and places portfolio decisions inside a defined risk management framework.

The UCITS wrapper allows the strategy to be offered to institutional and wholesale investors outside the U.S. RBC BlueBay noted demand for income-focused credit solutions amid low cash returns and changing rate expectations.

The fund intends to cover the broad U.S. high-yield bond market rather than concentrate on a single sector. Managers will integrate top-down market and sector views with bottom-up analysis of individual issuers. Portfolio construction and risk controls are designed to address default and liquidity risks in high-yield markets.

Leary stated, “There is strong institutional and wholesale demand among investors outside the United States for income-oriented performing credit solutions.” Skiba added that, given elevated inflation, U.S. high-yield bonds can help protect portfolios from inflation erosion.

BlueBay is part of RBC Global Asset Management and has managed U.S.-focused high-yield strategies since 2017. The growth of the U.S. vehicle to more than $1 billion reflects increased investor demand for active credit management. The UCITS launch follows a wider industry trend of offering U.S.-centric credit strategies in Europe and other jurisdictions via UCITS.