High Yield
Inception Date: 1/1/1996; 7/1/2005; 10/1/2000
Benchmark: Barclays Capital US Corporate High Yield 2% Issuer Capped Bond Index;
From the inception date to May 31, 2005, the benchmark for the US High Yield Constrained composite was the Barclays Capital U.S. Corporate High Yield Bond Index; beginning June 1, 2005 the benchmark was changed to the Barclays Capital U.S. Corporate High Yield 2% Issuer Capped Bond Index. The 2% Capped Index is identical to the Corporate High Yield Index with the exception that exposure to any issuers is limited to 2% of the total index.
Barclays Capital US Corporate High Yield 2% Issuer Capped Bond Index;
Barclays Capital US Corporate BB High Yield 2% Issuer Capped Bond Index
Aviva Investors High Yield Fact Sheet
Description:
Aviva Investors High Yield Fixed Income strategy consists primarily of investments in higher quality tier high yield bonds from US Dollar denominated bond issuers in developed countries. This approach is designed to outperform during the credit cycle on both a total return and risk adjusted return basis. Through careful selection, the strategy’s management team aims to generate a high total return, risk-adjusted return and minimize principal loss by analyzing each potential candidate company’s fundamentals, capital structure, and bond relative valuations. Aviva Investors employs three separate high yield composites, including US High Yield Constrained, US High Yield Unconstrained and US BB High Yield, all targeted at producing income and capital appreciation.
Commentary
The Barclays Capital Global High Yield Constrained Index turned in its fourth consecutive quarter of positive returns, at 6% for the fourth quarter of 2009, ending the year at 62.33% and easily offsetting 2008’s worst-year record of -38.4%. Going into 2010, we expect that declining default rates, tightening spreads, ample money supply, a strong primary market and the risk of rising interest rates will position the high yield asset class attractively against other classes. We recommend a moderate overweight to high yield with a focus on BB and B rated bonds and credit selection.
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Fact Sheet
Aviva Investors provides detailed composite information including performance and portfolio characteristics on a quarterly basis. Please follow the link to view this quarter's high yield fact sheet.
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Investment Process
Aviva Investors seeks to customize investment solutions to the client's objectives, including spread/return objectives, rating agency guidelines and risk parameters. Those objectives are the foundation for our five-phase investment process.
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Research Framework
Aviva Investors uses the FTV framework as the cornerstone of our investment process: Fundamentals, Technicals and Valuations.
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