
Aristotle Credit Partners
Short Duration High Yield Bond
Strategy Overview
The Short Duration High Yield Bond strategy seeks to provide strong risk-adjusted returns relative to the ICE BofA 1-3 Year BB-B U.S. Cash Pay Fixed Maturity High Yield Constrained Index with lower return volatility than the benchmark over a full market cycle. The strategy seeks to optimize long-term returns with a focus on mitigating market risk through a combination of high current income and capital appreciation.
Investments are focused on the upper two tiers of the high yield market as we believe these credits generally possess more favorable risk-reward profiles compared to other high yield bonds. We seek credits with strong fundamentals, ample cash flow, solid capital structures and low default risk. Investments are focused on credits with a final maturity of four years or less.
Benchmark: ICE BofA 1-3 Year BB-B U.S. Cash Pay Fixed Maturity High Yield Constrained Index
Cash: Maximum 5%
Minimum Issue Size: $150M Original Issuance
Maximum Issue Holding: 10% of Original Issuance
Maximum Industry Allocation: 30% Issuance
Maturity Constraints: Maximum 4-year final maturity
Portfolio Minimum Average Quality: B2
Minimum Security Rating: B/CCC
Issuer Max: BB: 4%; B: 3%; B/CCC: 2%
Maximum Allocation to Split B/CCC: 5%
Duration: +/- 25% of Index
Investment Grade Securities: Up to 25%

