Commentary
3Q2024 - Opportunistic High Yield Commentary
We maintain a constructive view of the high yield bond and leveraged loan markets. Although spreads are tight, the opportunity to uncover relative value remains.
Read the full commentary & disclosures here
- During the third quarter, the Polen Capital U.S. Opportunistic High Yield Composite (the “Composite”) underperformed the ICE BofA U.S. High Yield Index (the “Index”) but outperformed the Credit Suisse Leveraged Loan Index, net of fees.
- High yield bonds and leveraged loans generated positive performance in the third quarter, with high yield bonds outperforming leveraged loans. Falling yields and resilient economic activity supported leveraged credit markets in Q3.
- In Q3, Simmons Food and Surgery Partners contributed the most to total returns, while American Tire Distributors and OnTrac were the largest detractors.
- Polen Capital did not make any meaningful changes to portfolio positioning. However, we continue to experience refinancing activity among loans and have deployed those proceeds primarily into high yield bonds.
- We believe current yield levels in leveraged credit markets are compelling and more than compensate investors for the increased risk associated with tighter spreads.
- As an active manager, we believe we are well positioned to identify attractive opportunities amongst issuers across each segment of the leveraged credit markets and to potentially generate alpha.