Leveraged Finance U.S. Higher Quality High Yield
PGIM Fixed Income's U.S. Higher Quality High Yield Strategy seeks to add +125 bps Over Bloomberg Barclays U.S. High Yield Ba/B 1% Capped Index over a full market cycle by emphasizing research-based security selection, subsector/industry selection and rotation, and trading.1,2 The Strategy focuses primarily on the upper quality tier (BB and B rated credits) of the high yield market, which historically has exhibited the most attractive risk/return characteristics.
1 There is no guarantee that this objective will be met.
2 On average, over a full market cycle defined as three to five years.
PGIM Fixed Income employs a disciplined, three-step investment process to manage U.S. Higher Quality High Yield Portfolios:
Leverage firm resources to define the current global backdrop and risk appetite
Security selection, portfolio construction, risk budgeting
Macroeconomic & Fundamental Research
Market strategists provide continual macroeconomic assessment
Research team evaluates all issuers in the universe. Focus on downside protection:
- Asset Quality
- Capital Structure
Relative Value Analysis
Portfolio managers evaluate and maximize relative value among approved universe:
- Choose regions & select countries that reflect macro perspective
- Choose fundamentally strong credits with best relative value
Credit Analysts, portfolio managers, and risk managers provide continuous oversite:
- Actively monitor all credits
- Closely monitor industry and issuer exposures
A rigorous process is employed to monitor risk at all levels