US High Yield
A disciplined credit process led by one of the largest dedicated non-investment grade credit teams
- Disciplined and repeatable process managed by experienced and stable investment team
- Three sources of value generation: deteriorating credit avoidance; industry and quality rotation; and relative value analysis
- Comprehensive credit analysis driven by proprietary “Credit Best Practices” with risk management overlay and ESG framework
Key Risks
Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.
Liquidity Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Credit Risk: The risk that bond issuers may fail to meet their interest repayments, or repay debt, resulting in temporary or permanent losses to the portfolio.
Interest Rate Risk: The risk of interest rate movements affecting the value of fixed-rate bonds.
Counterparty Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events.
Currency Risk: Investments in a currency other than the base currency of the portfolio are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment. If the currency of the portfolio is different from your local currency, then you should be aware that due to exchange rate fluctuations the performance may increase or decrease if converted into your local currency.
Overview
Investment Philosophy
We believe:
- An investment process can add value across market cycles
- Inherent volatility in high-yield markets can provide experienced managers with compelling relative value opportunities
- Risk management is key to successful high-yield investing
Investment Process
-
Universe
All corporate securities rated below BBB-, which is comprised of approximately 1,000 issuers. -
Eliminate
Less liquid issuers, defaulted and distressed securities and outliers and high default potential issuers. -
Relative Value Screen
Apply “Credit Best Practices” checklist. -
Best Ideas
Credit analysis capabilities are complemented with a technology-driven set of proprietary analytical processes to identify, select and monitor portfolio positions. We leverage a customized database containing detailed information on over 2,000 U.S. credits. We select 100–150 issuers to own in client portfolios.
Quality Objective
We focus on B and BB and Opportunistic use, including BBB and CCC credit tiers as well as floating rate corporate loans. Portfolios are customized to meet client guidelines.
Management
Christopher Kocinski, CFA
Joe Lind, CFA
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