HAKINMHAN
Average Annual Total Returns for Class Y Shares
Month-to-Date | Quarter-to-Date | Year-to-Date | 1-Year | 3-Year | 5-Year | 10-Year | |
Pioneer High Yield Fund (MUTF:TYHYX) | 0.87% | 1.31% | 3.78% | 10.35% | 1.42% | 3.40% | 3.41% |
ICE BofA US High Yield Index (Benchmark) | 1.09% | 1.09% | 2.62% | 10.45% | 1.65% | 3.73% | 4.21% |
| Gross expense ratio: 0.94% Net Expense Ratio: 0.86% Call 1-800-225-6292 or visit Amundi US for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class Y shares are not subject to sales charges and are available for limited groups of investors, including institutional investors. Initial investments are subject to a $5 million investment minimum, which may be waived in some circumstances. All results are historical and assume the reinvestment of dividends and capital gains. Periods of less than one year are actual, not annualized. Other share classes are available for which performance and expenses will differ. The net expense ratio reflects the contractual expense limitation currently in effect through March 1, 2025, for Class Y shares. There can be no assurance that Amundi US will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers, fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. |
Market Review
After an initial pick-up in April, US economic data softened over the second quarter and has generally been coming in below consensus since early May. Despite this, the Federal Reserve (the Fed) struck a hawkish tone at its June conference with all but one cut being removed from the 2024 projections. Chair Jerome Powell noted that inflation is taking longer than expected to reach the Fed's target. Consequently, investors revised their expectations, recognizing that the Fed is unlikely to start the rate cut cycle before September. Against this backdrop, investment grade fixed income markets were broadly flat for the quarter, with the Bloomberg US Aggregate Index returning 0.07%. This weakness affected high yield to a lesser extent. Treasury yields ended the quarter where they started. Other major markets' 10-year yields were also mostly unchanged, except Japan's, which rose 20 bps to 1% for the first time in 11 years as the Bank of Japan (BOJ) gradually exits negative interest rates.
US Corporates slightly underperformed US Treasuries with a return of -0.09%. High Yield Corporates returned 1.09%, Morningstar Leveraged Loans 1.90% and Emerging Markets Corporates 1.5%, respectively. Emerging Markets Sovereign Debt was the outlier with a 0.1% quarterly return. Strong performance of mega-cap technology stocks drove a 4.28% return for the S&P 500 Index. (SP500,SPX)
Performance Review
During the second quarter, the primary driver of the Portfolio's outperformance relative to the benchmark was a result of sector selection with individual security selection a secondary driver.
On a sector selection basis, positive relative returns were achieved within Media (underweight), Telecommunications (underweight) and Healthcare (underweight). Allocations to Automotive (overweight), Insurance (underweight) and Technology (underweight) were detractors to relative performance. In Healthcare, easing of labor pressures while threats to the reimbursement regimes were minimal was viewed as creating overall benign conditions, which upgraded the relative attractiveness of multiple issuers.
Security selection was positive within Telecommunications, Automotive and Transportation, while individual selections within Real Estate, Healthcare and Consumer Goods were a drag on performance.
The Portfolio is generally positioned to be underweight the more interest rate sensitive BB rated tier in favor of B rated bonds. As the higher quality cohort outperformed, the portfolio's significant underweight to BB was a detractor to relative performance. Individual security selection was strong within all rating tiers during the first quarter.
Market Outlook and Positioning
We expected continued slowing in real final sales as real income growth has softened, consumer sentiment has softened, and labor demand has normalized. In our view, the decrease in home sales during May highlights a new headwind to US economic growth in the short term, and May's pending home sales reaching an all-time low in the 23-year history of the series could portend further slowing in the homebuilding and housing finance sectors. The surge in new home construction post-COVID is surpassing demand, leading to the highest inventory of new homes for sale since 2010. We believe builders are likely to reduce new construction significantly until the surplus inventory is reduced, negatively impacting Gross Domestic Product (GDP) growth in at least Q2 and Q3. Additionally, we believe uncertainties related to the upcoming US elections may further hamper business investment in the immediate future.
Performance Analysis and Market Commentary
As US High Yield spreads ended the second quarter near historically tight levels, we view today's tight valuations as calling for defensive positioning considering these economic headwinds. We believe increasing the weight of "income producers", the most defensive of the four classifications in our performance driver framework, may be the best way to gather a reasonable amount of spread income while reducing broad market exposure. We will continue to seek attractively priced "spread tighteners", the performance driver category consisting of issuers earning their way to higher valuations; we see security selection within lower tier credits as critical for performance.
| See glossary of frequently used terms for definitions. The ICE BofA US High Yield Index is an unmanaged, commonly accepted measure of the performance of high-yield securities. The US Treasury Index an index based on recent auctions of US Treasury bills and is commonly used as a benchmark when determining interest rates, such as mortgage rates. The S&P 500 Index measures the performance of the broad US stock market. The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Indices are unmanaged and their returns assume reinvestment of dividends and do not reflect any fees or expenses. You cannot invest directly in an index. Glossary of Frequently Used Terms Basis Point - A unit of measure used to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form. In most cases, it refers to changes in interest rates and bond yields. Carry - Represents the cost or benefit of owning an asset. Correlation - The degree to which assets or asset class prices have moved in relation to one another. Correlation ranges from -1 (always moving in opposite directions) through 0 (absolutely independent) to 1 (always moving together). Credit Spreads (or Spreads) - The differences in yield between two fixed-income securities with similar maturities. Dividend Yield - Refers to a stock's annual dividend payments to shareholders, expressed as a percentage of the stock's current price. Dot Plot - The Fed's "dot" plot/projection is a quarterly chart summarizing the outlook for the federal funds rate for each of the FOMC's members. Duration - A measure of the sensitivity of the price (the value of principal) of a fixed income investment to a change in interest rates, expressed as a number of years. Excess Return - Represent investment performance generated by a security or portfolio that exceed the "riskless" performance of a security generally perceived by the market to be risk-free, such as a certificate of deposit or a government-issued bond. Insurance-linked securities - Investments sponsored by property-and-casualty insurers to help mitigate the risk of having to pay claims in the wake of natural disasters. Liquidity Premium - Any form of additional compensation that is required to encourage investment in assets that cannot be easily and efficiently converted into cash at fair market value. Mark to Market ‒ Involves recording the price or value of a security, portfolio, or account to reflect the current market value rather than the book value. Real Yield ‒ The yield provided by an investment once inflation is taken into account. Spread sectors ‒ Nongovernmental fixed-income market sectors that offer higher yields, at greater risk, than governmental investments. Yield Curve (Curve) - A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates. Yield to Maturity - The total return anticipated on a bond if the bond is held until the end of its lifetime. Yield to Worst (YTW) - The lowest potential yield that can be received on a bond without the issuer actually defaulting The views expressed are those of Amundi US and are current through June 30, 2024. These views are subject to change at any time based on market or other conditions, and Amundi US disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for strategies are based on many factors, may not be relied upon as an indication of trading intent on behalf of any portfolio. A Word about Risk The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, changes in interest or currency rates, lack of liquidity in the bond markets, the spread of infectious illness or other public health issues or adverse investor sentiment. Investments in high-yield or lower rated securities are subject to greater-than-average price volatility, illiquidity and possibility of default. The market price of securities may fluctuate when interest rates change. When interest rates rise, the prices of fixed income securities in the Fund will generally fall. Conversely, when interest rates fall, the prices of fixed income securities in the Fund will generally rise. Investments in the Fund are subject to possible loss due to the financial failure of issuers of underlying securities and their inability to meet their debt obligations. Prepayment risk is the chance that an issuer may exercise its right to prepay its security, if falling interest rates prompt the issuer to do so. Forced to reinvest the unanticipated proceeds at lower interest rates, the Fund would experience a decline in income and lose the opportunity for additional price appreciation. The portfolio may invest in mortgage backed securities, which during times of fluctuating interest rates may increase or decrease more than other fixed-income securities. Mortgage backed securities are also subject to pre-payments. The Fund may use derivatives, such as options, futures, inverse floating rate obligations, swaps, and others, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Derivatives may have a leveraging effect on the Fund. The Fund may invest in common stock or other equity investments, whose market price can fluctuate. Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your financial professional or Amundi Asset Management US for a prospectus or a summary prospectus containing this information. Read it carefully. Individuals are encouraged to seek advice from their financial, legal, tax and other appropriate professionals before making any investment or financial decisions or purchasing any financial, securities or investment-related product or service, including any product or service described in these materials. Amundi US does not provide investment advice or investment recommendation.  Securities offered through Amundi Distributor US, Inc. Underwriter of Pioneer mutual funds, Member SIPC 60 State Street, Boston, Massachusetts 02109 ©2024 Amundi Asset Management US |
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
