News & Insights

Q2 2021 High Yield Market Update

Portfolio Manager Patrick Meegan reviews:

  • Performance drivers in the second quarter of 2021
  • Spread tightening and new issuance levels
  • Our assessment of high yield valuations, fundamentals, and technicals

 

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All investments contain risk and may lose value. This podcast is for general information only and should not be relied on for investment advice or recommendation of any particular security, strategy, or investment product.

Investment returns include reinvestment of dividends, interest and capital gains. Valuation is based on trade-date information. Net performance results are presented after actual management fees and all trading expenses but before custodial fees. The HY strategy’s returns for different time periods and market cycles can result in significantly different performance results. An account’s investment guidelines, timing of transactions, market conditions at the time of investment and other factors may lead to different performance results. The H&W High Yield composite, net of fees, and ICE BofA BB-B US High Yield Constrained Index through June 30, 2021: 2.86%, 19.37%, 6.43%, 6.03% and 2.57%, 13.44%, 6.99%, 6.43% for 2Q, one-, five-, and ten-years, respectively. Other performance disclosures are included in the strategy’s GIPS Report.

The portfolio manager’s views and opinions expressed in this podcast are as of July 19, 2021. Such views are subject to change and may differ from others in the firm, or the firm as a whole. The portfolio manager’s comments include some estimated and/or forecasted views, which are believed to be based on reasonable assumptions within the bounds of current and historical information. However, there is no guarantee that any estimates, forecasts or views will be realized. Any discussion or view on a particular company, asset class/segment, industry/sector and/or investment type are not investment recommendations, should not be assumed to be profitable, and are subject to change. In the event of new information or changed circumstances, H&W reserves the right to change its investment perspective and outlook and has no obligation to provide revised assessments and opinions.

The portfolio manager’s views on the high yield market should not be construed as the high yield strategy’s expected performance. There is no guarantee of the future performance of the high yield market, nor the high yield strategy. H&W does not provide any assurance that the high yield strategy’s objectives and goals will be achieved. The High Yield strategy’s benchmark refers to the ICE BofA BB-B US High Yield Constrained Index. Unless otherwise noted, the high yield market refers to the ICE BofA US High Yield Index.

Investing in high yield securities is subject to certain risks, including market, credit, liquidity, issuer, interest-rate, inflation, and derivatives risks. Lower-rated and non-rated securities involve greater risk than higher-rated securities. Investments in debt securities typically decreases in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investing in smaller and/or newer companies involves greater risks than those associated with investing in larger companies, such as business risk, significant stock price fluctuations and illiquidity.

Market Disruption: The global coronavirus pandemic has caused disruption in the global economy, unprecedented business and travel disruption and extreme fluctuations in global capital and financial markets. H&W is unable to predict the consequences of the upheaval caused by coronavirus pandemic, which has the potential to negatively impact the firm’s investment strategies and investment opportunities.

©2021 Hotchkis & Wiley. All rights reserved. No portion of the podcast may be published, reproduced, transmitted or rebroadcast in any form without the express written permission of H&W.

Past performance is not indicative of future performance.