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High Yield Core • High Yield • High Yield BB & B
Our High Yield strategies combine dynamic sector rotation and intensive credit research.
Intensive fundamental credit research within a top-down framework underpins our High Yield investment process. Our goal is to generate attractive risk-adjusted returns with a focus on capital preservation. We believe dynamic management of sector and industry exposures also enhances long-term performance. We are careful to avoid late cycle excesses in this process.
Fundamental credit analysis is the cornerstone of our investment process. We strive to take advantage of capital market dislocations, based on our fundamental sector and industry views and valuations. At Stone Harbor:
- Sector and industry allocations are a function of our economic outlook and industry view
- Focus is on companies with seasoned management, solid financials, good liquidity, appropriate leverage and/or asset protection over the cycle
- Risk is managed through portfolio diversification at both the industry and sector levels as well as at the individual company level
We offer a flexible range of high yield portfolios that may be customized to focus on specific credit quality targets such as our BB & B strategy. Portfolios may include tactical allocations to European high yield, convertibles, loans and special situations. These components of broader strategies may also be available as standalone portfolio offerings.
Our High Yield Core and BB & B strategies focus on the developed nations’ high yield corporate markets, while our High Yield strategy has the flexibility to invest in emerging markets debt.
Employing an actively managed approach to construct a diversified portfolio of high yield credits, we seek to:
- Identify attractive industries and sectors through in-depth qualitative and quantitative analyses
- Select securities with appropriate risk relative to economic, market and industry cycles
- U.S. and non-U.S. high yield corporates
- Leveraged loans, convertibles, private placements
- High yield portfolios may include tactical allocations of up to 20% to Emerging Markets Debt (hard and local currency)
Strategy Inception Dates:
High Yield Core: March 1992
High Yield: March 1993
High Yield BB & B: August 2003