COLLEGE p L a NNING | E s TaTE p L a NNING | INv E s TING | POrTFOlIO SPOTlIGHT | r E a L E s TaTE | rETIr EMENT | Ta X p L a NNING
BrandywineGlobal High Yield Fund
TICker
ASSeTS
BGHIX
$ 936 million
PerFOrmAnCe |
YTD |
1 yr . |
3 yr . |
5 yr . |
( Institutional Class shares ) |
-11.38% |
-9.86% |
3.86 % |
5.115 % |
TOP FIve HOldInGS
New Fortress Energy Inc . 6.75 %; Magnolia Oil & Gas Operating LLC / Magnolia Oil & Gas Finance Corp . 6 %; United Wholesale Mortgage LLC 5.5 %; Grubhub Holdings Inc . 5.5 %; FirstCash Holdings Inc . 5.625 %.
COnTACT InFO 800.342.5236 brandywineglobal . com
CredIT QuAlITY ( as a % of portfolio ) |
BBB |
0.46 % |
BB |
32.20 % |
B |
52.37 % |
CCC or lower |
6.77 % |
Not rated |
1.09 % |
Cash |
7.12 % |
performance numbers as of 6 / 15 / 22 . Credit quality and asset number as of 5 / 31 / 22 . Top 5 holdings as of 3 / 31 / 22 . sources : Eaton vance and Morningstar .
Top Of The Charts
The BrandywineGlobal High Yield Fund has been a five-year top performer . By Jeff Schlegel
In a YeaR wHen stOCks anD BOnDs Have Been HaMmered and some corners of the U . s . investment-grade corporate bond market suffered percentage losses in the mid-teens , perhaps one of the best things to say about the U . s . high-yield bond sector is that on the whole it performed slightly better , suffering only low double-digit losses while producing yields that were roughly three or four percentage points higher versus investment-grade bonds . that sounds like a backhanded compliment , but it ’ s a bit ironic that the riskier corporate junk bond category held up better than the supposedly safer investment-grade variety , particularly those securities with longer-dated maturities . then again , maybe it ’ s not so ironic .
“ High yield is in the Goldilocks area of fixed income where there ’ s not too much duration and not too much credit risk ,” offers John McClain , co-portfolio manager of the Brandywine- Global High Yield Fund . “ when looking across the fixed-income landscape right now , if you believe we won ’ t go into a recession , then high yield is the cheapest part of public fixed income .”
Despite the recession fears now that the Federal Reserve has hiked interest rates to fight inflation , McClain maintains that the high-yield sector offers some advantages for fixed-income investors .
“ If you think rates will get out of whack and go much higher , two things will happen . One , traditional high-quality fixed income , the so-called less risky part of the fixed-income market , will continue to have a larger drawdown than the highyield market . In addition , high yield going into and coming out of a recession does better than equities .”
But the high-yield debt market isn ’ t monolithic , and the trick is finding the right subsets as market conditions evolve . McClain and his partner , Bill Zox , have forged an impressive track record with a high-yield strategy that launched in limited partnership form in late 2014 , and two years later went out to a wider audience when the BrandywineGlobal High Yield Fund launched .
jULY / aUGUsT 2022 | FINaNCIaL aDvIsOr MaGazINE | 61