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A Bronze-Rated Fund in Search of High-Yielding Opportunities

Experienced managers and a solid process allow AB High Income to navigate the riskier sectors of the bond market.

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Emory Zink: AB High Income's primary objective is to dish out a healthy stream of income. To do so, its managers scour the fixed-income universe in search of high-yielding opportunities, investing heavily in high-yield corporate bonds and emerging-markets debt. All of the fund's assets may be rated below-investment-grade, and while most currency is hedged back to the U.S. dollar, a few tactical currency exposures exist along the periphery. 

Given the fund's investment menu, experienced portfolio managers and a solid process are critical, and AB High Income draws upon both. Portfolio managers include long-tenured names, such as head of emerging-markets debt Paul DeNoon and AB's fixed-income CIO, Douglas Peebles. Management benefits from quantitative models that are used in concert with bottom-up fundamental evaluation to narrow the broad universe and identify opportunities. Over the trailing 10 years ending March 2017, the fund's A-shares delivered 8.3% of annualized return--outpacing most high yield, emerging-markets, and multisector competitors. 

Emory Zink does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.