New mutual fund offers globally diversified approach to fixed-income investing
By using T. Rowe Price's in-depth credit research capabilities, the fund will employ a diversified approach to identifying opportunities across the globe. As much as 65% of the fund can be invested in noninvestment-grade securities and as much as 50% can be invested in non-U.S. dollar-denominated foreign debt securities. The portfolio's weighted average maturity is expected to be between four and 15 years.
Investments will include corporate bonds issued in the U.S. and abroad, high yield bonds and loans, mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, emerging market debt, convertible bonds, preferred stock, and government debt. The allocation to each asset class will vary depending on market conditions.
The fund's management team is led by fixed-income veteran
"With a flexible investment program, the Strategic Income Fund's exposure to a variety of debt instruments helps to moderate the risks of investing in high-yield bonds and foreign securities," says Mr. Huber. "While the fund invests without borders and focuses on securities with higher risk/reward potential, it tempers that risk by maintaining a significant exposure to investment-grade securities that aim to preserve capital.
"Today, we are finding attractive opportunities in investment-grade corporate bonds and mortgage-backed securities, as market volatility is resulting in high risk premiums in these sectors. Investors are being well compensated for taking risk, but strong credit analysis is especially important in this environment to assess credit quality. Although the fixed-income universe will likely continue to be tumultuous in the near term, we believe today's valuations of high-income securities offer attractive opportunities for long-term investors," says Mr. Huber.
The minimum initial investment in the Strategic Income Fund (PRSNX) and the Strategic Income Fund--Advisor Class (PRSAX) is
Yield and share price will vary with interest rate changes. Investors should note that if interest rates rise significantly from current levels, bond fund totals will decline and may even turn negative in the short term. Investing overseas also includes special risks, including declining foreign currencies or adverse political or economic events. For more information, please visit troweprice.com. The fund's prospectus, which is available on the site or by calling 1-800-541-8803, includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing. T. Rowe Price Investment Services, Inc., Distributor,
Founded in 1937,