1Q2025 - U.S. Opportunistic High Yield Commentary
In our view, remaining patient and not overreaching for yield will leave our portfolios well positioned to take advantage of compelling opportunities in this period of instability.
- During the first quarter, the Polen Credit U.S. Opportunistic High Yield Composite (the “Composite”) underperformed the ICE BofA U.S. High Yield Index, and the S&P UBS Leveraged Loan Index, net of fees.
- Below investment grade credit delivered mixed results, with positive performance concentrated in January and February amid declining yields and wider spreads. Leveraged loans underperformed high yield bonds.
- In Q1, SportsNet New York and Material Sciences contributed the most to total returns, while LaserShip and Resource Label Group were the largest detractors.
- Polen Capital did not make any meaningful changes to portfolio positioning in the first quarter. Most trading activity involved purchases and sales in existing holdings.
- As we enter 2025, our primary concerns today include continued market volatility, spread widening, and the Fed’s policy moves, potentially in response to ongoing trade wars and geopolitical risks.