KDP's Defensive High Yield strategy over the past 21 years has sought to provide a high level of current income, with a strong emphasis on principal preservation, by investing in better-quality US Dollar denominated high yield bonds and employing an investment approach focusing on fundamental analysis and active risk management. This strategy seeks to invest in companies, sectors and levels of the corporate debt structure where our analysts and investment managers see relative value and that the portfolio is being compensated sufficiently for the level of risk undertaken. All of these decisions are driven by KDP's Default Risk Ranking methodology.
PORTFOLIO STRATEGY AND CHARACTERISTICS
Provide a high level of current income with strong emphasis on principal preservation by investing in better-quality high yield bonds and employing an investment approach focusing on fundamental analysis and active portfolio and risk management.
Available as separately managed accounts.
INVESTMENT OBJECTIVES
- To provide a high level of current income with a strong emphasis on principal preservation
- To produce outperforming long-term performance with low volatility
- Benchmark: BofA Merrill Lynch HY BB-B Non-Distressed Index
INVESTMENT GUIDELINES
- Bottom-up, value-driven investment selection process
- Focus on better quality segment of the high yield market: target rating of BB-/B+
- Minimum KDP DRR of 3/5 (Low-B) for all purchases
- Focus on larger companies – Typically > $50MM Cash Flow (EBITDA)