High Yield spreads widened significantly over the course of 2022, making high yield valuations more attractive.

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(Updated from original version posted in September 2022)

High Yield spreads widened significantly over the course of 2022, making high yield valuations more attractive.

We believe the market now recognizes the quality differences between today’s issuers and HY market of the past.

Better valuations, stronger earnings yields, historically attractive performance, and solid balance sheets for many issuers may provide a liquidity buffer and downside mitigation IF we enter an economic downturn.

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Important Risk Considerations
Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities. High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities. Foreign Investing: Investing internationally involves additional risks such as currency, political, accounting, economic, and market risk. Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund. Market Volatility: Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issue, recessions, or other events could have a significant impact on the fund and its investments, including hampering the ability of the fund’s portfolio manager(s) to invest the fund’s assets as intended. Prospectus: For additional information on risks, please see a fund’s prospectus.

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