Benefits of investing in NBI

NBI aims to provide Unitholders with the following benefits:

• Global: Exposure to the high yield bonds of global companies.

• Income: The Manager aims to deliver a stable and consistent income stream, which, for the financial year ending 30 June 2019, is currently targeted at 5.25% per annum (net of fees and expenses), paid monthly, on the subscription price paid by investors under the IPO of the Trust, and is targeted to remain at the same rate for the financial year commencing 1 July 2019 (the "Target Distribution).

• Diversification: Exposure to a portfolio of 250-350 bonds issued by large, liquid global companies and diversified across countries, industries and credit quality.

• Security: Access to a large, experienced and stable investment team employing a disciplined and repeatable investment process with a strong emphasis on capital preservation by focusing on higher quality rated high yield corporate bonds and avoiding companies with deteriorating financials.

• Lower volatility: Access to an asset class with a track record of lower volatility and attractive returns, and, consequently, the potential to enhance the risk/return profile of your investment portfolio.

• Scale and Resources: Access to a large investment team located around the world, supported by the resources of the broader Neuberger Berman research platform with over 200 investment professionals.

• Experience: Access to the expertise of senior portfolio managers averaging 25 years' industry experience and with a 21 years' track record managing high yield corporate bonds.

• Commitment: Neuberger Berman has committed, once again, to pay for all the upfront costs of the Offer in full out of its own pocket.

About the Fund

The NB Global Corporate Income Trust (ASX:NBI) was listed on the ASX in September 2018. NBI provides investors with exposure to the high yield bonds of large and liquid companies globally. 

The investment objective of NBI is to provide its Unitholders with a consistent and stable income stream paid via monthly distributions, while achieving an attractive level of total return (income plus capital appreciation) over a full market cycle.

Investment strategy

The Investment Team's strategy for the Trust is to invest in and actively manage a portfolio of high yield corporate bonds issued by companies located globally across both developed and emerging markets, with a strong emphasis on capital preservation by focusing on higher quality within the Global High Yield Market, large and more liquid companies and by avoiding companies with deteriorating financials.

In implementing the Investment Strategy, the Investment Team adheres to a disciplined and repeatable investment process which involves the following four core elements:

1. Credit Analysis - the Developed Markets ("DM) and Emerging Markets ("EM) research analysts within the Investment Team undertake in-depth analysis on each potential investment within their respective investment universes with a view to generating investment ideas, which, subject to further vetting, may then be recommended to the Global High Yield Credit Committee for final review and approval to be included in the Portfolio. Please refer to Section 4.4.1 below for more detail.
2. Regional Sleeve Construction - the Investment Team then takes each investment approved by the Global High Yield Credit Committee and categorises it by region as U.S., Europe or EM, being the three regions to which the Portfolio's investments are broadly allocated, with a focus on diversification by country, industry and credit quality;
3. Asset allocation -the Portfolio's strategic asset allocation target to each region is currently determined to be in line with the underlying regional allocations of the Global High Yield Market, namely 60% to U.S. high yield corporate bonds, 20% to European high yield corporate bonds and 20% to EM U.S. dollar-denominated high yield corporate bonds. However, the allocations are expected to change over time, albeit only gradually, as the weighting of the three regions within the Global High Yield Market itself changes. Additionally, the Global High Yield Asset Allocation Committee may tilt the Portfolio's regional allocations away from the strategic asset allocation target and, in so doing, will actively manage those allocations on a tactical basis.
4. Risk management - throughout the investment process, the Investment Team utilises various third party risk management systems to assess risks associated with the potential investments and resulting Portfolio. Additionally, at the end of the process, Neuberger Berman's risk management team will provide independent oversight by performing an analysis of the whole Portfolio with a view to ensuring that the senior portfolio managers have not ended up with unintended risks in the Portfolio.

How we invest your money

In constructing the Portfolio, the Investment Team adopts a top-down investing approach. A top-down approach involves focusing on broader economic and market cycle themes in attempting to identify the regions, countries within regions and industries that are believed most likely to outperform the broader market.

Authorised Investments

Generally, the Manager is currently authorised to invest the Trust in all debt securities represented in the Index and their equivalents as determined by the Manager. Specifically, those investments include:

• corporate bonds;

• derivative instruments (for hedging purposes only); and

• cash and cash equivalents.

Investment Guidelines

Portfolio

• The Portfolio will hold no less than 100 issues at any time.

• The Portfolio's minimum exposure to high yield bonds at any time will be 80% of the Trust's NAV.

• The Portfolio's maximum exposure to CCC rated bonds at any time will be 30% of the Trust's NAV.

• The Portfolio will not hold any unrated bonds.

• The Portfolio's maximum holding of cash or cash equivalents will be 10% of the Trust's NAV.

Industry

• The Portfolio's exposure to any industry will generally not exceed the greater of 20% of the Trust's NAV or 3 times the Index weighting of that industry, subject to an absolute maximum of 30% of the Trust's NAV.

Issue / Issuer

• The Portfolio will not be invested in any bond issue which is less than US$200 million in size at the time of investment.

• The Portfolio's maximum exposure to a single issuer will not exceed 3% of the Trust's NAV. The Portfolio will not hold more than 10% of an issuer's outstanding debt at any time.