Portfolio Manager Mark Hudoff reviews:
- Performance drivers in Q3 2023
- Credit market dynamics, including the current interest rate environment
- Portfolio positioning and our current assessment of high yield fundamentals, technicals, and valuation
Portfolio Manager Mark Hudoff reviews:
The performance data quoted represents past performance and does not guarantee future results. Current performance may be lower or higher. Investment return and principal value of the fund will fluctuate, and shares may be worth more or less than their original cost when redeemed. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
Hotchkis & Wiley High Yield Fund standardized performance - from the dropdown menu, select month-end or quarter-end standardized fund performance
You should consider the Hotchkis & Wiley High Yield Fund’s investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund's summary prospectus and prospectus, which can be obtained by calling 800-796-5606. Read carefully before you invest.
Investments in debt securities involve credit risk and typically decrease in value when interest rates rise. Investments in lower rated and non rated securities involve greater risk. The fund may invest in derivatives, asset backed and mortgage backed securities, and foreign securities. Please read the fund prospectus for a full list of fund risks.
This material is for general information purposes and should not be used as the sole basis to make any investment decision. Views expressed are not intended to be relied upon as research regarding a particular industry, investment or the markets in general, nor is it intended to predict performance of any investment or serve as a recommendation to buy or sell securities. Hotchkis & Wiley (“H&W”) is not responsible for any damages or losses arising from any use of this information.
The portfolio manager’s views and opinions expressed are as of October 27, 2023. Such views are subject to change without notice and may differ from others in the firm, or the firm as a whole. The portfolio manager’s comments may include 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. 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/or opinions.
Information obtained from independent sources is considered reliable, but H&W cannot guarantee its accuracy or completeness. Certain information contained in this material represents or is based upon forward-looking statements. Due to various risks and uncertainties, actual events/results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.
Global financial crisis (GFC) refers to the period of extreme stress in global financial markets and banking systems between mid 2007 and early 2009; Quantitative easing (QE) is a form of monetary policy in which a central bank, like the U.S. Federal Reserve, purchases securities from the open market to reduce interest rates and increase the money supply; Spread usually refers to the difference between two prices (the bid and the ask) of a security or asset, or between two similar assets; Free cash flow (FCF) represents the cash that a company generates after accounting for cash outflows to support operations and maintain its capital assets; Leverage ratio is any one of several financial measurements that assesses the ability of a company to meet its financial obligations; Leveraged buyout (LB) refers to the purchase of a controlling share in a company by its management using outside capital; Basis point (bps) is a unit equal to 1/100th of 1% and is used to denote the change in a financial instrument; Duration measures the price sensitivity of a bond to interest rate movements; Alpha is the excess return of an investment relative to the return of a benchmark index; Top ten holdings as of 9/30/23 as a % of the Fund’s net assets: Boardriders Inc. 1.2%, Virgin Media Finance PLC 1.1%, CCO Holdings LLC 1.0%, Emerald Debt Merger Sub LLC 144A 0.9%, Carnival Corp. 0.9%, CCO Holdings LLC 0.8%, Iracore Int'l Hldgs Inc. 0.8%, CSC Hldgs LLC 0.7%, Highland Hldgs Bond Issuer Ltd. 0.7%, and EQM Midstream Partners LP 0.7%.
Credit Quality weights by rating were derived from the highest bond rating as determined by S&P, Moody's or Fitch. Bond ratings are grades given to bonds that indicate their credit quality as determined by private independent rating services such as Standard & Poor's, Moody's and Fitch. These firms evaluate a bond issuer's financial strength, or its ability to pay a bond's principal and interest in a timely fashion. Ratings are expressed as letters ranging from 'AAA', which is the highest grade, to 'D', which is the lowest grade. In limited situations when none of the three rating agencies have issued a formal rating, the Advisor will classify the security as nonrated. Investment Grade includes credits that are BBB- or above. Diversification does not assure a profit nor protect against loss in a declining market.
The ICE BofA US High Yield Index tracks the performance of below investment grade, but not in default, US dollar-denominated corporate bonds publicly issued in the US domestic market, and includes issues with a credit rating of BBB or below, as rated by Moody’s and S&P. The ICE BofA BB-B US High Yield Constrained Index contains all securities in the ICE BofA US High Yield Index rated BB+ through B- by S&P (or equivalent as rated by Moody’s or Fitch), but caps issuer exposure at 2%. Index constituents are capitalization weighted, based on their current amount outstanding, provided the total allocation to an individual issuer does not exceed 2%. The indexes do not reflect the payment of transaction costs, fees and expenses associated with an investment in the Fund. It is not possible to invest directly in an index.
The ICE BofA index data referenced is the property of ICE Data Indices, LLC (“ICE BofA”) and/or its licensors and has been licensed for use by Hotchkis & Wiley. ICE BofA and its licensors accept no liability in connection with its use. See Index definitions for full disclaimer.
Market Disruption: The global coronavirus pandemic has caused disruption in the global economy and extreme fluctuations in global capital and financial markets. H&W is unable to predict the impact caused by coronavirus pandemic, which has the potential to negatively impact the firm’s investment strategies and investment opportunities.
Past performance is not indicative of future performance.
Mutual fund investing involves risk. Principal loss is possible.
The Hotchkis & Wiley Funds are distributed by Quasar Distributors, LLC