High Yield and Core Plus Management

The High Yield investment strategy is designed to maximize total return (current income and price appreciation) primarily through the active management of securities rated Ba1/BB+ and below with maturities of less than five years. Barksdale Investment Management seeks to provide excess returns relative to an appropriate high yield benchmark (per individual client IPS) while maintaining an overall risk level similar to that of the index through the course of a market or credit cycle, but with opportunistic variances in risk positioning to reflect valuation anomalies.

At Barksdale, high yield portfolios are managed to reflect our philosophy that in normal or “fair value” credit markets, high yield returns are primarily a function of income and interest on income. However, at pronounced valuation extremes, capital appreciation or loss dominate income in determining total return. Hence, the execution of the WCB high yield strategy involves a balanced effort to (a) maximize income while minimizing capital loss potential (in low spread/yield environments) and (b) maximizing capital appreciation potential (in high spread/yield environments).

The Core Plus strategy is a blend of top-down and sector/security-specific analysis.  It is thorough and balanced, utilizing elements from fundamental, quantitative and technical analysis in order to maximize returns within each clients’ specified duration band while minimizing market, sector and credit risk.  The Core Plus strategy utilizes investment grade and high yield (up to 20% high yield securities unless otherwise specified) and does not expose client assets to excessive volatility.  Under most circumstances, Barksdale manages its portfolios with the intention of providing enhanced yield (and, therefore, over time excess total returns) over traditional fixed income alternatives, because the portfolios are generally over-weighted in corporate securities. The degree to which corporate bonds are over-weighted at any given time is dependent upon economic and market sector conditions and client guidelines 

The institutional high yield investment strategies, listed below, can be tailored to meet individual clients’ duration targets and risk profiles. Given the focus on customization and meeting the individual needs of the client, Barksdale is happy to work within guidelines ranging from short duration/maturity to ratings-constrained.