Payden & Rygel’s high-yield bond strategy seeks to maximize total return by focusing on the upper tier of the high-yield bond market. High-yield bonds can provide diversification and yield benefits to an investment portfolio due to their low correlation with both Treasuries and investment-grade corporate bonds.

The cornerstone of Payden & Rygel's high-yield strategy is its intensive credit due diligence. Firm analysts quantify the downside probability by thoroughly "drilling down" to the fundamentals of each company and pose the question, "what could go wrong?" This focus on credit and issuer selection has allowed the firm to avoid any defaults in high-yield portfolios. Payden & Rygel has generated upgrade-to-downgrade ratings ratios which significantly exceed the market's historical performance.

Total return opportunities
The firm focuses on bonds of companies and sectors where cash flow growth and debt reduction is a priority of management. This de-leveraging often results in ratings upgrades, the ultimate goal of a total return strategy.

Coordination with equity and corporate bond analysts
Daily dialogue with the firm's equity analysts adds significant value to the high-yield investment process. The equity market can be a leading indicator in forecasting events in the high-yield bond market. This ongoing collaboration helps discern credit trends and other fundamental factors, which either positively or negatively impact bond price levels.


More information on Payden & Rygel's fixed-income, equity and balanced investment strategies.