2Q2025 - U.S. Opportunistic High Yield Commentary
Entering the second half of 2025, our main concerns are consistent with those from the first quarter: market volatility, spread widening, and Fed policy responses to ongoing trade and geopolitical risks.
- During the second quarter, the Polen Credit U.S. Opportunistic High Yield Composite (the “Composite”) underperformed the ICE BofA U.S. High Yield Index, and outperformed the S&P UBS Leveraged Loan Index, net of fees.
- Below investment grade credit experienced volatile performance this quarter, primarily due to the initial Liberation Day announcement and a subsequent market recovery, with positive returns concentrated in May and June.
- In Q2 Athenahealth, Inc. and HUB International Ltd contributed the most to total returns, while SportsNet New York (SNY) and Oldcastle detracted the most significantly.
- Polen Capital did not make any meaningful changes to portfolio positioning in the second quarter. Most trading activity involved purchases and sales in existing holdings.
- We believe that remaining patient and avoiding the pursuit of excessive yield will position our portfolios to capitalize on compelling opportunities during this period of instability.