Global Fixed Income Compass
Quarterly insight from our fixed income teams to help clients navigate the markets and opportunities ahead.
INVESTMENT STRATEGIES
High Yield
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Overview
We believe a bottom-up, fundamentally driven investment process that is focused on free cash flow and confirming management intentions to transform and improve balance sheets can generate risk-adjusted outperformance over time. Through our comprehensive global research process and dynamic approach to managing through the credit cycle, we seek to deliver a less volatile client experience within the high-yield asset class over full market cycles.
Investment Approach
- The portfolio seeks to incorporate high-yield corporate bonds from companies committed to transforming and improving their capital structure. Our fixed income team is structured around credit industries with fundamental credit analysis driving decision-making at every level of the investment process.
- Partnership and fluid communication between fixed income and equity analysts promote idea generation. Credit research emphasizes free-cash-flow generation, quality of management and security valuation.
- Our proprietary fixed income portfolio and risk-management system, Quantum Global, is integrated into the investment process at each step. We identify and measure sources of risk in the portfolio at multiple levels to confirm that the portfolio is positioned as intended.
Core High Yield
Integrated Research
Sophisticated Risk Management
Portfolio Management
Featured Insights
Thoughts and Bonds: The Beginning of the End
Our Fundamental Fixed Income team provides insights on potential investment risks and opportunities, and shares our global outlook for the quarter ahead.
Performance
RETURNS
| Inception: Jan 01, 1996 | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inception |
|---|---|---|---|---|---|---|---|
| Composite Gross | 1.76% | 12.62% | 7.86% | 6.41% | 5.40% | 8.04% | 8.19% |
| Composite Net | 1.59% | 12.08% | 7.16% | 5.73% | 4.73% | 7.44% | 7.52% |
| Bloomberg Barclays U.S. Corporate High Yield Bond Index | 1.33% | 11.41% | 6.36% | 6.07% | 5.37% | 7.94% | 7.08% |
| Inception: Jan 01, 1996 | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inception |
|---|---|---|---|---|---|---|---|
| Composite Gross | 1.76% | 12.62% | 7.86% | 6.41% | 5.40% | 8.04% | 8.19% |
| Composite Net | 1.59% | 12.08% | 7.16% | 5.73% | 4.73% | 7.44% | 7.52% |
| Bloomberg Barclays U.S. Corporate High Yield Bond Index | 1.33% | 11.41% | 6.36% | 6.07% | 5.37% | 7.94% | 7.08% |
Past performance cannot guarantee future results. Investing involves risk, including the possible loss of principal and fluctuation of value. Returns greater than one year are annualized. Returns are expressed in U.S. dollars. Composite returns are net of transaction costs and gross of non-reclaimable withholding taxes, if any, and reflect the reinvestment of dividends and other earnings.
The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.
Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fee rate in effect for the respective time period, adjusted for performance-based fees where applicable. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.
For a complete list of holdings as of the most recently available disclosure period, contact us.
The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.
Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fee rate in effect for the respective time period, adjusted for performance-based fees where applicable. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.
For a complete list of holdings as of the most recently available disclosure period, contact us.
Commentary & Literature
2Q19 Portfolio Commentary Highlights
- Despite intra-quarter volatility, high-yield corporate credit generated positive total returns.
- The Portfolio outperformed its benchmark, aided by strong security selection.
- Valuations appear rich given slowing global economic growth, and we are positioned for moderate near-term pressure in high yield.