NB Global Floating Rate performs well in a difficult year – NB Global Floating Rate (NBLS) targets income generation whilst seeking to preserve investors’ capital and give protection against rising interest rates.
The year to 31 December 2017 again proved to be eventful not just in geopolitical or macroeconomic terms. United States and European senior secured floating rate loans in with the company invests, continued to perform well during the year, as fears over increasing default rates failed to materialise. Any defaults that were seen in the market came in identifiable sectors such as commodities, which, as the chairman said in his statement, reinforced “senior secured loans’ credentials as a stable and resilient asset class with favourable risk-adjusted return characteristics.“
Headwinds for the asset class
Credit spreads continued to tighten during 2017, as they did in 2016, and the market saw a record $650bn of leveraged loans issued during the year. The pace of interest rate increases, particularly outside the US, was slower than expected.
Performance
During the year the NAV total return of NBLS was 2.55% for the Sterling Ordinary Shares. During the same period the company’s share price total return fell by 2.27% per Sterling Ordinary Share. When the company released its report, shares traded at a discount of 4.0%.
Dividend
The dividend is down on the previous year due to the effect of currency hedging.
|
12 month rolling dividend yield |
As at 31 December 2017 | As at 31 December 2016 |
|
Sterling Ordinary Shares |
3.54% |
4.18% |
More on the fund
NB Global Floating Rate Income’s managers seek to generate this yield by investing in a global portfolio of below investment grade senior secured corporate loans with selective use of senior secured bonds, diversified by both borrower and industry