Seix Market Insights: Leveraged Loan and High Yield - February 8, 2016
Seix Investment Advisors
Description
Barclays U.S. Aggregate Index is an unmanaged index of U.S. bonds, which includes
reinvestment of any earnings and is widely used to measure the overall performance of the
U.S. bond market.
Investors cannot invest directly in an index. Barclays U.S. Corporate High Yield Bond Index is an unmanaged market value-weighted index that covers the universe of fixed rate, non-investment grade debt. Investors cannot invest directly in an index. Collateralized loan obligations are securities backed by a pool of debt, often low-rated corporate loans. Credit Suisse Leveraged Loan Index is a market-weighted index that tracks the performance of institutional leveraged loans. Credit Spreads are the difference between the yields of sector types and/or maturity ranges. Credit Ratings noted herein are calculated based on S&P, Moody’s and Fitch ratings.
Generally, ratings range from AAA, the highest quality rating, to D, the lowest, with BBB and above being called investment grade securities. BB and below are considered below investment grade securities. If the ratings from all three agencies are available, securities will be assigned the median rating based on the numerical equivalents.
If the ratings are available from only two of the agencies, the more conservative of the ratings will be assigned to the security. If the rating is available from only one agency, then that rating will be used. Ratings do not apply to a fund or to a fund’s shares.
Ratings are subject to change. Real Estate Investment Trust (REITS) is a type of security that invests in real estate through property or mortgages and often trades on major exchanges like a stock. Investment Risks: Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. Generally, a fund’s fixed income securities will decrease in value if interest rates rise and vice versa.
Although a fund’s yield may be higher than that of fixed income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk of that fund’s underlying securities. Floating rate loans are typically senior and secured, in contrast to other below-investment grade securities. However, there is no guarantee that the value of the collateral will not decline, causing a loan to be substantially unsecured. Loans generally are subject to restrictions on resale. Participation interests in loans, rather than direct ownership, may limit the ability of a fund to enforce its rights and may involve assuming additional credit risks. The views expressed by the funds’ managers are as of the quarter-end specified.
This information is general in nature, provided as general guidance on the subject covered, and is not intended to be authoritative. It is subject to change without notice as market conditions change, and is not intended to predict the performance of any individual security, market sector, or RidgeWorth Fund. All information contained herein is believed to be correct, but accuracy cannot be guaranteed.
Investors are advised to consult with their investment professional about their specific financial needs and goals before making any investment decision. Past performance is not indicative of future results. ©2016 Seix Investment Advisors LLC. Seix Investment Advisors LLC is a registered investment adviser with the SEC and a member of the RidgeWorth Capital Management LLC network of investment firms. All third party marks are the property of their respective owners. RFRI-SEIXLL-1215 .
Investors cannot invest directly in an index. Barclays U.S. Corporate High Yield Bond Index is an unmanaged market value-weighted index that covers the universe of fixed rate, non-investment grade debt. Investors cannot invest directly in an index. Collateralized loan obligations are securities backed by a pool of debt, often low-rated corporate loans. Credit Suisse Leveraged Loan Index is a market-weighted index that tracks the performance of institutional leveraged loans. Credit Spreads are the difference between the yields of sector types and/or maturity ranges. Credit Ratings noted herein are calculated based on S&P, Moody’s and Fitch ratings.
Generally, ratings range from AAA, the highest quality rating, to D, the lowest, with BBB and above being called investment grade securities. BB and below are considered below investment grade securities. If the ratings from all three agencies are available, securities will be assigned the median rating based on the numerical equivalents.
If the ratings are available from only two of the agencies, the more conservative of the ratings will be assigned to the security. If the rating is available from only one agency, then that rating will be used. Ratings do not apply to a fund or to a fund’s shares.
Ratings are subject to change. Real Estate Investment Trust (REITS) is a type of security that invests in real estate through property or mortgages and often trades on major exchanges like a stock. Investment Risks: Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. Generally, a fund’s fixed income securities will decrease in value if interest rates rise and vice versa.
Although a fund’s yield may be higher than that of fixed income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk of that fund’s underlying securities. Floating rate loans are typically senior and secured, in contrast to other below-investment grade securities. However, there is no guarantee that the value of the collateral will not decline, causing a loan to be substantially unsecured. Loans generally are subject to restrictions on resale. Participation interests in loans, rather than direct ownership, may limit the ability of a fund to enforce its rights and may involve assuming additional credit risks. The views expressed by the funds’ managers are as of the quarter-end specified.
This information is general in nature, provided as general guidance on the subject covered, and is not intended to be authoritative. It is subject to change without notice as market conditions change, and is not intended to predict the performance of any individual security, market sector, or RidgeWorth Fund. All information contained herein is believed to be correct, but accuracy cannot be guaranteed.
Investors are advised to consult with their investment professional about their specific financial needs and goals before making any investment decision. Past performance is not indicative of future results. ©2016 Seix Investment Advisors LLC. Seix Investment Advisors LLC is a registered investment adviser with the SEC and a member of the RidgeWorth Capital Management LLC network of investment firms. All third party marks are the property of their respective owners. RFRI-SEIXLL-1215 .
