Portfolio Breakdown as of 03/31/2015

Bank Loans
High Yield Bonds
Other
Cash

Credit Quality Distribution as of 03/31/2015

BBB
BB
B
CCC
<CCC
Not Rated

Portfolio Details as of 03/31/2015

Total Net Assets
$6.77 B
Number of Holdings
428
Average Loan Size
$1.61 B
Average Spread
3.79%

Portfolio Positioning as of 03/31/2015

  • Intensive credit analysis remains paramount to our process, as new deal terms have become less favorable to investors and structures have become more aggressive. We continue to apply discipline as to which new issues we buy, since pricing and the structure of deals in the current new-issue market often have not been up to our underwriting standards.
  • Technicals in the loan market have become more favorable; issuance is down year over year, the pace of outflows has slowed, and the bid from CLO issuers remains strong.
  • We believe individual credit decisions will become increasingly important in the future.  Thus, we have been looking for opportunities to trade out of ‘BB’ rated credits into ‘B’ rated issues at appealing valuations.
  • Spreads on the leveraged loan index are narrower than they were at the start of 2015; however, the average dollar price is still at a discount. Thus, we believe there remains the opportunity for capital appreciation in the loan market in 2015.

Sector Allocation as of 03/31/2015

Media/Telecom
Healthcare
Service
Information Technology
Gaming/Leisure
Retail
Utility
Financial
Energy
Food/Tobacco
Food And Drug
Chemicals
Aerospace
Manufacturing
Forest Products
Transportation
Housing
Consumer Non-Durables
Metals/Minerals
Consumer Durables
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