US Fixed Income

The high yield corporate debt market consists of corporate debt issues with credit ratings below BBB. Due to the “non-investment grade” ratings assigned to their debt, issuers in this class offer higher yields based on the higher perceived default risk.

By constructing a diversified portfolio of over 100 corporate debt issuers, an investor can materially reduce the risk of principal loss caused by a default or credit downgrade without sacrificing the aggregate yield and return opportunity. Further, by applying a rigorous research and examination process on issuers, one can materially reduce the portfolio default experience.

This marketplace remains inefficient and largely misunderstood. History has shown that a diversified portfolio of debt - issued by solvent, US based corporations that have passed our fundamental research screening process - can provide attractive returns with a fraction of the volatility associated with other asset classes with similar return structures.

PENN offers four high yield investment styles. Our Defensive high yield and Double-B high yield styles emphasize capital preservation. The Short Duration high yield style preserves capital and generates current income while managing duration and the Opportunistic high yield style emphasizes total return.

Our team oriented security selection and portfolio construction process, refined over 24 years, has enabled us to produce attractive long term track records.