Aberdeen Investments has launched the abrdn SICAV I Global Enhanced Yield Bond Fund (“the Fund”), offering a differentiated approach to global high yield investing by harvesting coupon income. The Fund is also SFDR Article 8 compliant.
The Fund is available for distribution in Hong Kong and European countries including Austria, Belgium, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Switzerland and the UK.
The Fund aims to isolate and enhance returns generated from coupon (i.e. interest payments) and carry (i.e. the income earned by holding investments) within portfolio construction. It also explores the opportunity set globally by allocating up to 30% in emerging markets, while maintaining at least 70% developed market exposure and an average portfolio credit rating of BB-.
George Westervelt, Head of Global High Yield, Aberdeen Investments, comments:
“In an environment where financial markets are increasingly influenced by volatile and opaque macroeconomic headlines, dependable coupon income plays a critical role in both preserving and strengthening total returns for our investors.
Global high yield remains one of the most compelling segments in fixed income, but unlocking its potential isn’t straightforward. Coupon income can consistently drive total returns – but capturing it requires more than passive exposure. A global, risk-aware approach that combines diversification, disciplined credit selection and robust risk management can help investors harness the power of high yield without stretching into excessive risk.”
Fixed income often conjures images of modest returns. But global high yield stands out. Over the past 20 years, it has delivered annualised returns of around 6-7%. However, many investors struggle to unlock its full potential. Liquidity constraints, forced rebalancing, and capturing defaults can all erode returns, particularly in less liquid parts of the market. Deconstructing the return drivers of global high yield
over the last 5, 10, and 20 years, by far the most important return driver for high yield is coupon income, accounting for over 110% of total returns across 5, 10, and 20-year periods—making it the dominant and most consistent return source. Duration plays a limited role given the short-dated nature of the asset class, and while security selection matters, it can be volatile – in 9 out of the last 20 calendar years, the return contribution from spread changes has been negative.
Emerging Markets (EM) often offer higher coupons than Developed Markets (DM), without necessarily introducing disproportionate risk. Recent data indicates that EM high-yield bonds typically yield 8-9%, compared to 5-7% in DM. Global diversification can help investors achieve a better balance between income, yield and risk, reducing reliance on any single market as a source of performance.
George Westervelt added: “Adopting a global approach to high-yield investing enables access to a wider range of yield and credit quality across regions. Through effective security selection, it is possible to find higher-yielding, higher-coupon bonds in Emerging Markets issued by companies with stronger credit ratings than their Developed Markets counterparts. This supports a portfolio construction approach focused on maximising income, without the need to venture into the riskiest segments of the developed market.”
Aberdeen Investments has been investing in bonds for almost 200 years. With more than 140 fixed income professionals across Europe, the US, and Asia, the firm managed £139 billion in fixed income assets for clients as of 31 December 2025.
