Hotchkis & Wiley High Yield Fund - Class Z · NASDAQ:HWHZX
Hotchkis & Wiley High Yield Fund - Class Z — Hotchkis & Wiley — Debt Investor Presentation (October 2019)
11 slides from Hotchkis & Wiley High Yield Fund - Class Z's debt investor presentation, Oct 17, 2019
Slide 1: Hotchkis & Wiley High Yield Webinar for Investment Professionals
Hotchkis & Wiley High Yield Webinar for Investment Professionals October 17, 2019 Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Invest
Slide 2: Performance Disclosures
Performance Disclosures Average annual total returns as of September 30, 2019: 3Q19 1 Year 3 Year 5 Year 10 Year H&W High Yield Fund – I Shares (net of fees) -0.65% 1.43% 4.61% 4.07% 7.74% H&W High Yield Fund – I Shares (gross of fees) -0.48 2.16 5.35 4.81 8.50 ICE BofAML BB-B US HY Constrained Inde
Slide 3: Investment Team – Large and Experienced
Investment Team – Large and Experienced Mark Hudoff Ray Kennedy H&W Tenure: 10 Years – Equity Owner H&W Tenure: 10 Years – Equity Owner Industry Experience: 32 Years Industry Experience: 34 Years Prior to H&W: PIMCO, Head of Global Prior to H&W: PIMCO, MD, Head of High Yield Investments Global High
Slide 4: 3Q19 Attribution by Rating (%)
3Q19 Attribution by Rating (%) As of September 30, 2019 High Yield Fund ICE BofAML BB-B U.S. HY Constrained Attribution Analysis Average Total Contribution Average Total Contribution Allocation Security Total Rating Weight Return to Return Weight Return to Return Effect Selection Effect Investment G
Slide 5: 3Q19 Attribution by Sector (%)
3Q19 Attribution by Sector (%) As of September 30, 2019 High Yield Fund ICE BofAML BB-B U.S. HY Constrained Attribution Analysis Average Total Contribution Average Total Contribution Allocation Security Total Sector Weight Return to Return Weight Return to Return Effect Selection Effect Automotive 4
Slide 6: Sector Weights and Characteristics
Sector Weights and Characteristics As of September 30, 2019 High Yield Fund Sector Weights less ICE BofAML BB-B U.S. High Yield ICE BofAML BB-B HY Constrained (%) Characteristics Fund U.S. HY Constrained Average Coupon Rate 6.4% 6.1% Materials & Construction - Industries Yield-to-Worst 7.1% 5.0% For
Slide 7: The Small Cap Advantage
The Small Cap Advantage As of September 30, 2019 Cumulative Performance (3/31/97 - 9/30/19) 450% 420.7% 400% 350% 331.8% 300% Small Cap 250% Credits 200% Large Cap Credits 150% 100% 50% 0% Small cap credits: ICE BofAML US Small Cap (by par) Cash Pay High Yield Index. Large cap credits: ICE BofAML US
Slide 8: Outlook: Deteriorating Fundamentals & Mediocre Valuation
Outlook: Deteriorating Fundamentals & Mediocre Valuation Cautious… …Bullish 1 2 3 4 5 Overall Fundamentals Technicals Valuation 2.0 3.0 3.0 Slightly Negative Stable Disequilibrium Mediocre = Default rate ok, but ticking up = Decent fund flows = Excess spread offsets low yields = Leverage flat + Stro
Slide 9: Default & Recovery Rates
Default & Recovery Rates As of September 30, 2019 Distressed Debt and Default Rate High Yield Market Recovery Rate & Loss Rate (Trailing 12 Months) 35% 70% 30% 60% 25% 50% Distressed Debt (% of total market) 20% 40% Recovery 34.5% 15% 30% Rate Default Rate 10% (LTM%) 20% 5% 10% 2.5% Loss Rate 1.7% 2
Slide 10: Endnotes
Endnotes Top ten holdings as of September 30, 2019 as a % of the Fund’s net assets: HCA Inc. 1.4%, General Electric Co. 1.4%, CCO Holdings LLC 1.2%, American Zinc Recycling 1.1%, Rain CII Carbon LLC 1.0%, Rayonier A.M. Products Inc. 0.9%, Enviva Partners LP 0.9%, CSC Hldgs LLC 0.9%, Schweitzer-Maudu
Slide 11: Hotchkis & Wiley
Hotchkis & Wiley
Hotchkis & Wiley — Debt Investor Presentation (October 2019) on 6ix