Person looking at computer screen

High Yield Fund

  • Vehicle Mutual Fund
  • Asset Class Fixed Income

Overview

The GMO High Yield Fund seeks to generate total return in excess of that of its benchmark, the Markit iBoxx USD Liquid High Yield Index. The Fund aims to take long risk exposure in the U.S. high yield asset class in a more liquid format than the typical high yield portfolio.

We use a proprietary, factor-based model, which has identified several sectors of the high yield market that over time tend to generate superior returns compared to the index as a whole. While the model can allocate to several cash bond strategies within the high yield market, our tool kit also includes investment options such as ETFs, total return swaps on high yield indices, and the CDX market. The factor-based model dynamically adjusts the allocations to the different investment options using factors such as carry, roll down, ratings distribution, and spread, all compared to the index.

Facts

Doc Table
Fund Inception Date June 25, 2018
Fund Total Assets as of 6/30/2019 $222mm USD
Benchmark Markit iBoxx USD Liquid High Yield

Share Class VI

Inception Date June 25, 2018
Ticker Symbol GHVIX
CUSIP 362014532
NAV as of 7/19/2019 20.62
Net Expense Ratio 1 0.55
Gross Expense Ratio 2 0.67
Minimum Investment Size $300mm in Fund / $750mm in GMO

1 Net Expense Ratio reflects the reduction of expenses from fee reimbursements. The fee reimbursements will continue until at least June 30, 2020. Elimination of this reimbursement will result in higher fees and lower performance.

2 Gross Expense Ratio is equal to the Funds Total Annual Operating Expenses set forth in the Funds most recent prospectus dated June 30, 2019.

Performance

Quarter-End as of June 30, 2019(USD, %)

Table Caption
1-Year ITD
High Yield Fund 9.98 9.41
Markit iBoxx USD Liquid High Yield 8.10 7.47
  • High Yield Fund
  • Markit iBoxx USD Liquid High Yield

Inception Date: June 25, 2018

Returns shown for periods greater than one year are on an annualized basis.

If certain expenses were not reimbursed, performance would be lower. Transaction costs, if any, are paid to the fund to offset the cost of portfolio transactions to invest or raise cash.

Performance data quoted represents past performance and is not indicative of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data provided herein.

Quarter-End as of June 30, 2019(USD, %)

Table Caption
QTD YTD 1-Year ITD
High Yield Fund 2.83 10.31 9.98 9.41
Markit iBoxx USD Liquid High Yield 2.42 10.10 8.10 7.47
  • High Yield Fund
  • Markit iBoxx USD Liquid High Yield

Inception Date: June 25, 2018

Returns shown for periods greater than one year are on an annualized basis.

Net of all fees and expenses after reimbursement by the Manager, but not transaction costs, if any. If certain expenses were not reimbursed, performance would be lower.

Performance data quoted represents past performance and is not indicative of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data provided herein.

Quarter-End as of June 30, 2019(USD, %)

Table Caption
QTD YTD 1-Year ITD
High Yield Fund 2.96 10.59 10.54 9.97
Markit iBoxx USD Liquid High Yield 2.42 10.10 8.10 7.47
  • High Yield Fund
  • Markit iBoxx USD Liquid High Yield

Inception Date: June 25, 2018

Returns shown for periods greater than one year are on an annualized basis.

Gross of fees, expenses and transaction costs, if any. If these fees, expenses and costs were included, performance would be lower.

Performance data quoted represents past performance and is not indicative of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data provided herein.

Month-End as of June 30, 2019(USD, %)

Table Caption
MTD QTD YTD 1-Year ITD
High Yield Fund 3.13 2.83 10.31 9.98 9.41
Markit iBoxx USD Liquid High Yield 2.54 2.42 10.10 8.10 7.47
  • High Yield Fund
  • Markit iBoxx USD Liquid High Yield

Inception Date: June 25, 2018

Returns shown for periods greater than one year are on an annualized basis.

Net of all fees and expenses after reimbursement by the Manager, but not transaction costs, if any. If certain expenses were not reimbursed, performance would be lower.

Performance data quoted represents past performance and is not indicative of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data provided herein.

Month-End as of June 30, 2019(USD, %)

Table Caption
MTD QTD YTD 1-Year ITD
High Yield Fund 3.17 2.96 10.59 10.54 9.97
Markit iBoxx USD Liquid High Yield 2.54 2.42 10.10 8.10 7.47
  • High Yield Fund
  • Markit iBoxx USD Liquid High Yield

Inception Date: June 25, 2018

Returns shown for periods greater than one year are on an annualized basis.

Gross of fees, expenses and transaction costs, if any. If these fees, expenses and costs were included, performance would be lower.

Performance data quoted represents past performance and is not indicative of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data provided herein.

Year Ending December 31 (USD, %)

Calendar
High Yield Fund Markit iBoxx USD Liquid High Yield
2018 -0.70 -2.30
  • High Yield Fund
  • Markit iBoxx USD Liquid High Yield

Inception Date: June 25, 2018

Returns shown for periods greater than one year are on an annualized basis.

Net of all fees and expenses after reimbursement by the Manager, but not transaction costs, if any. If certain expenses were not reimbursed, performance would be lower.

Performance data quoted represents past performance and is not indicative of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data provided herein.

Year Ending December 31 (USD, %)

Calendar
High Yield Fund Markit iBoxx USD Liquid High Yield
2018 -0.44 -2.30
  • High Yield Fund
  • Markit iBoxx USD Liquid High Yield

Inception Date: June 25, 2018

Returns shown for periods greater than one year are on an annualized basis.

Gross of fees, expenses and transaction costs, if any. If these fees, expenses and costs were included, performance would be lower.

Performance data quoted represents past performance and is not indicative of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data provided herein.

Management

Auth_Joe

Joe Auth

Head of Structured Products

Mr. Auth is engaged in portfolio management for GMO’s Structured Products team. Prior to joining GMO in 2014, he was a Portfolio Manager for the Harvard Management Company. Previously, he was a Research Director at Standish Mellon Asset Management. Mr. Auth earned his B.A. in government and history from the Connecticut College and his M.B.A. from the University of Connecticut. He is a CFA Charterholder.

Risks

Risks associated with investing in the Fund may include those as follows. (1) Management and Operational Risk: The risk that GMO's investment techniques will fail to produce desired results. (2) Market Risk - Fixed Income: The market price of a fixed income investment can decline due to a number of market-related factors, including rising interest rates and widening credit spreads or decreased liquidity due to market uncertainty about the value of a fixed income investment (or class of fixed income investments). (3) Credit Risk: The risk that the issuer or guarantor of a fixed income investment or the obligor of an obligation underlying an asset-backed security will be unable or unwilling to satisfy its obligation to pay principal and interest or otherwise to honor its obligations in a timely manner. The market price of a fixed income investment will normally decline due to the issuer's, guarantor's, or obligor's failure to meet its payment obligations or in anticipation of such failure. For a more complete discussion of these risks and others, please consult the Fund's prospectus.

Disclosures

An investor should consider the fund’s investment objectives, risks, charges and expenses before investing. This and other important information can be found in the fund’s prospectus. Read the prospectus carefully before investing. Please see prospectus above.

The GMO Trust funds are distributed in the United States by Funds Distributor LLC. GMO and Funds Distributor LLC are not affiliated.