4Q2024 - U.S. Opportunistic High Yield Commentary
In our view, maintaining patience and avoiding an overreach for yield will enable our portfolios to remain well-positioned to capitalize on compelling opportunities as the cycle matures.
- During the fourth quarter, the Polen Capital U.S. Opportunistic High Yield Composite (the “Composite”) outperformed the ICE BofA U.S. High Yield Index (the “Index”) but underperformed the Credit Suisse Leveraged Loan Index, net of fees.
- Rising yields and spread widening led to mixed results for below investment grade credit.
- In Q4, Baffinland Iron Mines Corporation and Assured Partners contributed the most to total returns, while Medical Solutions and Dexko Global were the largest detractors.
- Polen Capital did not make any meaningful changes to portfolio positioning in the fourth quarter.
- However, we increased positions in certain existing holdings. Further, we executed relative value sales in positions that had rallied during the quarter.
- As we step into 2025, our primary concerns remain focused on the risks of a potential monetary policy misstep, a softening consumer, widening fiscal deficits, and escalating geopolitical tensions.