European high-yield funds are popular among investors looking for enhanced income, though they come with higher risk, especially in volatile markets. Here are a few categories and specific types of funds in Europe that may offer higher yields:
1. High-Yield Bond Funds
These funds invest in corporate bonds with lower credit ratings but offer higher yields.
- BlackRock European High Yield Bond Fund: Focuses on European corporate bonds with a higher yield, providing broad exposure to the European high-yield debt market.
- AXA WF European High Yield Bonds Fund: Offers access to European high-yield corporate bonds, focusing on diversifying risk while targeting high returns.
- M&G European High Yield Bond Fund: One of the larger funds in this category, M&G focuses on high-yield corporate bonds across various sectors in Europe.
2. Dividend-Focused Equity Funds
These funds invest in stocks of companies that offer high and stable dividends, often from well-established firms in mature industries.
- Allianz Europe Equity Dividend Fund: Focuses on high-dividend European equities, particularly companies with strong balance sheets and consistent dividend payouts.
- BNY Mellon European Income Fund: Invests in companies across Europe that are known for paying above-average dividends.
- Schroder European Dividend Maximiser Fund: Utilizes a dividend capture strategy, seeking to deliver high yields through both dividends and option strategies.
3. Real Estate Investment Trusts (REITs)
European REITs offer exposure to real estate sectors like commercial, residential, and industrial properties while delivering attractive yields.
- Tritax EuroBox REIT: Focuses on logistics assets across Europe, benefiting from the e-commerce boom, offering both capital appreciation and high dividend yields.
- Unibail-Rodamco-Westfield REIT: A European retail-focused REIT offering attractive yields due to its large-scale properties and geographic reach.
4. Infrastructure Funds
Investments in infrastructure such as energy, utilities, and transportation can deliver stable, higher yields.
- Macquarie European Infrastructure Fund: Provides exposure to infrastructure projects in Europe, focusing on essential services with long-term yield generation.
- Brookfield Infrastructure Fund: Specializes in infrastructure investments, including energy and transportation, with a focus on stable cash flow.
5. Private Debt Funds
These funds focus on direct lending and private debt, often providing higher yields than traditional bonds or equities.
- BlueBay European High Yield Bond Fund: Invests in private credit and debt markets, offering exposure to higher returns while accepting higher credit risk.
- CVC Credit Partners European Opportunities: A closed-ended fund that focuses on European credit markets, including leveraged loans and high-yield bonds.
Key Considerations:
- Risk: High-yield investments come with added risk, particularly in high-yield bonds and private debt. Investors should carefully consider credit risks and market volatility.
- Geopolitical and Economic Factors: Europe’s economic performance and geopolitical situation, including inflation and interest rate policies, can affect high-yield sectors.
- Diversification: Ensure a balanced portfolio to mitigate risk, especially when dealing with high-yield assets.
It's essential to consult with a financial advisor to align these funds with your investment goals and risk tolerance.
