Philosophy

We believe high yield bonds represent a higher risk/reward opportunity within the fixed income investment spectrum. High yield offers:

  • Potential for more “equity-like” returns, while generating higher current income 
  • Less sensitivity to interest rates versus long-term U.S. Treasury bonds
  • Diversification benefits within an overall investment or fixed income portfolio given lower correlations to other asset classes

Process

Large Cap Value Chart

Benchmark: Barclays U.S. Corporate High Yield Index

Our High Yield fixed income investment process aims for attractive risk-adjusted returns by combining active bottom-up security selection with a top-down risk management overlay. We evaluate the universe of BB+ or below rated securities, comprising approximately 1,500 issues. A systematic screening focuses on cash flow, issuer operating strength, and valuation. Security selection combines quantitative credit analysis, qualitative credit factors, capital structure, and the determination of relative value. Finally, the portfolio is constructed on a risk-managed basis through issuer and industry diversification and a consistent sell discipline.