The Active Advantage in High Yield

Key Insights

• Active management of high yield bonds offers several advantages over a passive approach, in our view.
• Relative to equities, there are inherent complexities in bond markets that make it difficult and expensive to replicate the composition of an index.
• Active management allows for fundamental analysis across the full high yield universe as well as the ability to strategically reposition a portfolio.

There is a strong case to be made for active management in high yield bonds, in our view, with an active approach offering several important advantages. Active management allows for fundamental analysis and security selection across the full high yield universe as well as the ability to strategically reposition a portfolio to take advantage of macro trends or to capitalize on relative value opportunities.

We take an active, flexible, concentrated approach to the high yield market and seek to generate alpha¹ through a high-conviction portfolio of best ideas. Our active approach is supported by proprietary fundamental credit research performed by a seasoned and collaborative team of investment professionals who focus exclusively on the high yield market. We believe our active approach to high yield can help improve investor outcomes and mitigate downside risks over the long term.

¹ Alpha is the excess return of an investment relative to its benchmark.

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