HIGH YIELD CORPORATE BONDS

Strategy Overview

Account Minimum: $100,000*  | Launch of Strategy: April 1, 1989

For investors seeking potentially greater returns, this strategy focuses on bonds rated in the top two rating categories (BB & B).  Securities rated CCC and lower are not eligible for purchase.  Our objective is to achieve greater returns than might be available in the investment grade universe while avoiding the greater risk associated with lower credit quality securities (CCC and lower).

The portfolio management team employs a value approach whereby we purchase only U.S. dollar denominated corporate bonds and seek those that we feel are undervalued. Preservation of capital is considered essential to the objective of the portfolio, which is total return over a full market/economic cycle.

We access over 30 institutional broker/dealers seeking competitive bids and offerings. This trading network provides all of our clients with best pricing. A strict sell discipline is employed within the strategy.

Portfolio Statistics

(as of 06/30/2018)

wdt_ID name value
1 Average Maturity 7.20 yrs
2 Duration 5.20
3 Coupon 5.6%
4 Yield to Maturity 5.84%
5 Current Yield 5.69%
6 Target Diversification 33-40 issues
7 Average Credit Rating B1/B+

Resources

Bottom-Up Approach

Identify investment opportunities that represent the most attractive value, with strong prospects for consistent income and growth.

Minimize Overall Volatility

Focused on the upper tier of the High Yield credit curve (BB-B), as well as the conservative portion of a firm’s capital structure (Senior Subordinated Debentures) and CCC rated securities are not eligible for purchase.

Established companies & industries

Emphasis on established industries leads us to avoid sectors that have precarious operating profiles.

Enhanced Liquidity & Safety

By investing only in bonds with an initial issue size generally in excess of $100,000,000.

Diversified

The portfolio is diversified across more than 35 issues and the industry group (a subset of sector) concentration is approximately 12%.

Low Turnover

Historical low turnover of the portfolio, on average less than 45% per year, helps to reduce transaction costs.

Strategy Data

Calendar Year Returns (Gross)

Annualized Returns

(period ended 06/30/2018)

wdt_ID Period CAM Gross CAM Net of Fees Bloomberg Barclays US Corporate High Yield Index
1 YTD -2.03 -2.20 0.16
2 1 Year 0.39 0.04 2.62
3 3 Years 1.27 0.92 5.53
4 5 Years 2.52 2.15 5.52
5 10 Years 5.26 4.86 8.19
6 Inception 7.04 6.53 8.10

Risk Statistics

(period ended 06/30/2018)

wdt_ID Period Standard Deviation CAM HY (%) Standard Deviation Barclays High Yield Index (%) Sharpe Ratio CAM HY Sharpe Ratio Barclays High Yield Index
1 3 Yrs. 5.49 5.71 0.11 0.84
2 5 Yrs. 5.10 5.03 0.41 1.01
3 10 Yrs. 9.28 11.96 0.52 0.65
4 Inception 7.37 9.70 0.54 0.51

Annualized Returns

(period ended 06/30/2018)

Risk Statistics

(period ended 06/30/2018)

Maturity Distribution

Duration Distribution

Industry Distribution

Credit Quality Distribution

wdt_ID Type Value
1 AAA 0.00%
2 AA 0.00%
3 A 0.00%
4 BAA 2.30%
5 BA 43.5%
6 B 54.2%
7 CAA 0.00%
8 CA 0.00%
9 < C 0.00%
10 NR 0.00%