News & Insights

Q2 2024 High Yield Market Update

Portfolio Manager Ray Kennedy reviews:

  • Performance drivers in the second quarter of 2024
  • How current credit spreads compare to previous market cycles
  • Our current assessment of high yield fundamentals, technical, and valuation

 

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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 prospectuswhich 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 July 23, 2024. 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.

Interest coverage is a financial ratio used to determine how well a company can pay the interest on its outstanding debts; Convexity demonstrates how the duration of a bond changes as the interest rate changes; CLO - collateralized loan obligation; Spread usually refers to the difference between two prices (the bid and the ask) of a security or asset, or between two similar assets; 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. 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 index does 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.

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. Diversification does not assure a profit nor protect against loss in a declining market.

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

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