Commentary
2Q2024 - Credit Opportunities Commentary
High yield bonds and leveraged loans produced gains in the second quarter, with leveraged loans outperforming their fixed rate peers. Compelling earnings, active primary markets, and a cooperative macro environment supported the leveraged credit market.
Read the full commentary & disclosures here
- During the second quarter, the Polen Credit Opportunities Full Discretion Composite outperformed the ICE BofA U.S. High Yield Index by 35 bps, net of fees.
- Specialty Steel Holdco and IPS Corp contributed the most to total returns during the quarter, while American Tire Distributors and OnTrac detracted the most.
- We made no significant changes to portfolio positioning during the quarter. We initiated a position in HUB International's 7.375% unsecured notes due 2032 and exited our position in Hertz Global Holdings 4.625% Senior Notes due 2026.
- We believe current yield levels in high yield bond and leveraged loan markets are compelling and more than compensate investors for the increased risk associated with tighter spreads.
- Polen Capital continues to identify attractive opportunities amongst issuers across each segment of the leveraged credit markets.
- We view the current environment as favorable for experienced active managers like us to potentially identify opportunities for significant alpha.
