Active U.S. High Yield Bond Strategy


Investment Objective

Investment Objective

The Strategy seeks to provide a total investment return in excess of the performance of its benchmark index (the "Index") over the long term.

BENCHMARK: Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Cap Index


Investment Strategy

Investment Strategy

The Strategy employs proprietary fundamental credit research combined with a comprehensive top-down investment process to construct a portfolio that seeks to outperform its benchmark through full market and credit cycles. Debt securities may be publicly issued or privately placed, either fixed, zero coupon, payment in kind, variable or floating rate, U.S. or foreign (including emerging market debt) and may be denominated in U.S. dollars or foreign currencies. The Portfolio may also invest in privately issued bank loans. Fundamental credit research focuses on strength of management, positive industry fundamentals, improving financials, attractive security terms, appropriate relative value and asset protection. The combination of top-down investment strategy and bottom-up fundamental analysis ensures proper portfolio positioning with regard to issuer and industry diversification, quality distribution, yields to worst and duration. Portfolio metrics are monitored to stay within the Strategy's risk/return objectives. The Strategy only invests in issuers where we can attempt to analyze and quantify potential risks and returns. Our team approach utilizes proprietary and external analytical tools and models. In general, the Strategy will seek to outperform its benchmark index by approximately 100-150 bps (on an annualized basis) over the long term, with a projected tracking error* of approximately 100-300 bps.  There can of course be no assurance that any Portfolio will achieve its investment objective or will maintain a given level of tracking error. A Portfolio may underperform the Index.

Our multi-dimensional risk management process consists of continuous risk controls imbedded within our process, as well as external oversight by SSGA's Risk Management Group. The Strategy only invests in issuers where we can attempt to analyze and quantify potential risks and returns. We utilize sophisticated dynamic risk estimation techniques in combination with a common sense approach to risk management through risk limits and stop losses.

Note:

Source: Bloomberg Barclays Indices. ©2018 Bloomberg Finance L.P. and its affiliates. Used with permission.

There are risks involved with investing, including possible loss of principal. You should refer to the Strategy's Disclosure Document (SDD) for a complete description of the risks of investing in the Strategy. Please contact SSGA's relationship management team for a copy of the SDD.