Portfolio Breakdown as of 03/31/2016

Bank Loans
High Yield Bonds
Investment Grade Bonds
Other
Cash

Credit Quality Distribution as of 03/31/2016

BBB
BB
B
<B
Not Rated

Portfolio Details as of 03/31/2016

Total Net Assets
$6.03 B
Number of Issues
444
Average Loan Size
$1.63 B
Average Spread
3.6989

Portfolio Positioning as of 03/31/2016

  • Volatility in the credit markets experienced in the second half of 2015 continued into 2016, as markets digested the U.S. Federal Reserve’s interest rate increase. We believe volatility may continue as markets assess further potential rate increases, economic data from China, and supply/demand fundamentals in the commodities space.
  • The portfolio has overweight positions, relative to its benchmark, the Credit Suisse Leveraged Loan Index, in consumer-oriented sectors, including food and drug, retail, and gaming/leisure. We targeted these sectors, and certain companies within them, as beneficiaries of increased consumer spending resulting from savings derived from the decline in energy prices.
  • The portfolio currently is underweight ‘B’ rated credits relative to its benchmark, although this underweight position narrowed during the quarter, as we rotated out of ‘BB’ rated credits into ‘B’ names to capitalize on valuations. Given attractive valuations, we may look to continue transitioning some ‘BB’ exposure into ‘B’ names going forward.
  • Spreads on the leveraged-loan index are still above long-term averages, and the average dollar price remains at a discount. Thus, we believe there remains the opportunity for both current income and some capital appreciation in the loan market in 2016.

Sector Allocation as of 03/31/2016

SERVICE
HEALTHCARE
RETAIL
GAMING/LEISURE
INFORMATION TECHNOLOGY
MANUFACTURING
MEDIA/TELECOM-TELECOMMUNICATIONS
MEDIA/TELECOM-CABLE/WIRELESS VIDEO
HOUSING
AEROSPACE
TRANSPORTATION-AUTOMOTIVE
CHEMICALS
ENERGY
MEDIA/TELECOM-DIVERSIFIED MEDIA
FOOD/TOBACCO
FOOD AND DRUG
UTILITY
METALS/MINERALS
FOREST PROD/CONTAINERS
MEDIA/TELECOM-BROADCASTING
FINANCIAL
CONSUMER NON-DURABLES
Other
TRANSPORTATION-LAND TRANSPORTATION
CONSUMER DURABLES
TRANSPORTATION-SHIPPING
MEDIA/TELECOM-WIRELESS COMMUNICATIONS
Fund Dividends & Cap Gains next tab

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