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 the upper tier of the High Yield credit curve (BA & B). Securities rated CAA 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 (CAA 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 6/30/2024)
wdt_ID | name | value |
---|---|---|
1 | Average Maturity | 4.90 |
2 | Duration | 3.90 |
3 | Coupon | 5.41% |
4 | Yield to Maturity | 6.50% |
5 | Current Yield | 5.66% |
6 | Target Diversification | 33-40 Issues |
7 | Average Credit Rating | B1 |
Resources
High Yield Brochure
High Yield Profile
High Yield Client Agreement
CAM Strategy Guide
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 (BA-B), as well as the conservative portion of a firm’s capital structure (Senior Subordinated Debentures) and CAA 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.
Strategy Data
Calendar Year Returns (Gross)
Annualized Returns
(period ended 6/30/2024)
wdt_ID | Period | CAM Gross | CAM Net of Fees | Bloomberg US Corporate High Yield Index |
---|---|---|---|---|
1 | YTD | 2.69 | 2.54 | 2.58 |
2 | 1 Year | 9.89 | 9.57 | 10.43 |
3 | 3 Years | 0.64 | 0.34 | 1.64 |
4 | 5 Years | 3.30 | 2.99 | 3.92 |
5 | 10 Years | 2.71 | 2.38 | 4.31 |
6 | Inception | 6.57 | 6.09 | 7.48 |
Risk Statistics
(period ended 6/30/2024)
wdt_ID | Period | Standard Deviation CAM HY (%) | Standard Deviation Bloomberg High Yield Index (%) | Sharpe Ratio CAM HY | Sharpe Ratio Barclays High Yield Index |
---|---|---|---|---|---|
1 | 3 Yrs. | 9.13 | 8.30 | -0.29 | -0.19 |
2 | 5 Yrs. | 9.77 | 10.29 | 0.11 | 0.17 |
3 | 10 Yrs. | 8.10 | 8.48 | 0.15 | 0.33 |
4 | Inception | 7.79 | 9.77 | 0.47 | 0.46 |
Annualized Returns
(period ended 6/30/2024)
Risk Statistics
(period ended 6/30/2024)
Maturity Distribution
Industry Distribution
Credit Quality Distribution
wdt_ID | Type | Value |
---|---|---|
1 | AAA | 0.0 |
2 | AA | 0.0 |
3 | A | 0.0 |
4 | BAA | 11.9 |
5 | BA | 62.9 |
6 | B | 22.7 |
7 | CAA | 2.5 |
8 | CA | 0.0 |
9 | < C | 0.0 |
10 | NR | 0.0 |
*Bloomberg Index Ratings
MONTHLY RETURN CORRELATIONS (SINCE 1984)
(as of 12/31/2023)
High Yield | X-Over | U.S. Credit | S&P 500 | EM* | Govt | U.S. Agg | Ba | B | Caa | |
---|---|---|---|---|---|---|---|---|---|---|
Crossover | 0.92 | |||||||||
Credit | 0.57 | 0.73 | ||||||||
S&P 500 | 0.63 | 0.63 | 0.36 | |||||||
EM | 0.63 | 0.63 | 0.56 | 0.55 | ||||||
Govt | 0.22 | 0.35 | 0.84 | 0.14 | 0.31 | |||||
Agg | 0.34 | 0.49 | 0.91 | 0.21 | 0.40 | 0.96 | ||||
Ba | 0.94 | 0.98 | 0.68 | 0.62 | 0.62 | 0.19 | 0.31 | |||
B | 0.99 | 0.88 | 0.54 | 0.62 | 0.62 | 0.19 | 0.31 | 0.91 | ||
Caa | 0.90 | 0.77 | 0.38 | 0.56 | 0.54 | 0.04 | 0.14 | 0.78 | 0.88 | |
Lev. Loans | 0.77 | 0.73 | 0.37 | 0.48 | 0.44 | -0.09 | 0.04 | 0.73 | 0.74 | 0.79 |
*EM since 1994
Source Bloomberg Research and Indices