Welcome!

News Feed Item

Actively Managed High Yield Bond Funds May Offer Sustainable Income: RidgeWorth Investments Releases New White Paper

ATLANTA, Feb. 10, 2014 /PRNewswire/ -- In the quest for sustainable income sources that keep pace with inflation, investors may feel pressured when relying only on investment grade bonds. But according to a white paper recently issued by RidgeWorth Investments (RidgeWorth), for investors who can withstand short-term portfolio volatility, high yield bonds may offer three distinct benefits.

RidgeWorth's publication, "In Search of Yield: The Case for Actively Managed High Yield Bond Funds," suggests investors may benefit from an actively managed portfolio of high yield bonds. The paper explains the attractive characteristics of these securities, highlighting the key differences between investing through actively managed mutual funds and passive exchange traded funds (ETFs), a commonly used vehicle to invest in high yield bonds.

"An actively managed fund can benefit from a highly experienced manager's ability to deftly navigate shifting market conditions in an effort to increase potential return," said George Goudelias, managing director at Seix Investment Advisors, a boutique investment firm owned by RidgeWorth. "ETFs, on the other hand, are often designed to track the performance of an index. As such, little or no attention is given to managing credit risk or striving to take advantage of pricing inefficiencies," he added.

According to the paper, high yield bonds typically pay a higher coupon than Treasuries and high grade corporate bonds, offering a more attractive level of income. "High yield bonds may be more vulnerable to credit risk, but we believe some exposure to high yield investments may be beneficial to investors, particularly during this low yield environment – if you are investing with an experienced management team," said Ashi Parikh, CEO & CIO of RidgeWorth Investments.

High yield bonds tend to have less sensitivity to price declines than their higher quality counterparts during periods of rising interest rates, providing the potential for added security in a changing rate environment. "Of course, by definition, these bonds are riskier than their fixed income counterparts. Professional managers are continually evaluating the market and making portfolio adjustments to help investors minimize that downside risk," Parikh added.  

High yield bonds share characteristics of both equities and bonds. Their prices tend to mimic the equity market yet they still offer the income potential of other fixed income investments and investors may also profit from attractive risk-adjusted returns during favorable equity market conditions. When combined with other income asset classes in a diversified portfolio, an allocation to high yield bonds may temper principal fluctuation and potentially enhance returns over the long term.

The paper concludes that against the current interest rate backdrop, high yield bonds may offer advantages to investors who have been unsatisfied with returns from traditional fixed income securities. In particular, actively managed high yield bond mutual funds may offer yield potential for individual investors, especially those nearing retirement.  

To access this white paper, visit www.ridgeworth.com/high-yield. Additional research tools are also available at www.ridgeworth.com/news-insights/ridgeworth-research.

About RidgeWorth Investments
RidgeWorth Investments serves as a holding company that owns interests in six investment boutiques with $50.3 billion of assets under management as of December 31, 2013. RidgeWorth's investment boutiques manage a wide variety of investment disciplines across the fixed income, equity, and asset allocation asset classes. Our boutiques provide investment management services to a growing client base that includes endowments, foundations, corporations, healthcare organizations, municipalities, public funds, associations, insurance companies, labor unions and high net worth individuals. In addition, RidgeWorth serves as the investment adviser to the RidgeWorth Funds mutual fund family. RidgeWorth Investments is a trade name for RidgeWorth Capital Management, Inc., an investment adviser registered with the SEC headquartered in Atlanta, GA. RidgeWorth Funds are distributed by RidgeWorth Distributors LLC, which is not affiliated with the Adviser. For more information about RidgeWorth, visit www.ridgeworth.com.

Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. Generally, a fund's fixed income securities will decrease in value if interest rates rise and vice versa. U.S. Government guarantees apply only to the underlying securities of the fund's portfolio and not the fund's shares. Floating rate loans are typically senior and secured, in contrast to other below investment grade securities. However, there is no guarantee that the value of the collateral will not decline, causing a loan to be substantially unsecured. Loans generally are subject to restrictions on resale. Certain types of loans may limit the ability of the Fund to enforce its rights and may involve assuming additional credit risks.

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. For performance data current to the most recent month end, visit our website at www.ridgeworth.com.  

An investor should consider the funds' investment objectives, risks, and charges and expenses carefully before investing or sending money. This and other important information about the RidgeWorth Funds can be found in the fund's prospectus. To obtain a prospectus, please call 888-784-3863 or visit www.ridgeworth.com. Please read the prospectus carefully before investing.

©2014 Seix Investment Advisors LLC is a registered investment adviser with the SEC and member of the RidgeWorth Capital Management, Inc. network of investment firms.

©2014 RidgeWorth Investments. RidgeWorth Investments is the trade name for RidgeWorth Capital Management, Inc., an investment adviser registered with the SEC and the adviser to the RidgeWorth Funds. RidgeWorth Funds are distributed by RidgeWorth Distributors LLC, which is not affiliated with the adviser. Collective Strength Individual Insight is a federally registered service mark of RidgeWorth Investments.

NOT FDIC INSURED

NO BANK GUARANTEE

MAY LOSE VALUE

SOURCE RidgeWorth Investments

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Digitization is driving a fundamental change in society that is transforming the way businesses work with their customers, their supply chains and their people. Digital transformation leverages DevOps best practices, such as Agile Parallel Development, Continuous Delivery and Agile Operations to capitalize on opportunities and create competitive differentiation in the application economy. However, information security has been notably absent from the DevOps movement. Speed doesn’t have to negat...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Your business relies on your applications and your employees to stay in business. Whether you develop apps or manage business critical apps that help fuel your business, what happens when users experience sluggish performance? You and all technical teams across the organization – application, network, operations, among others, as well as, those outside the organization, like ISPs and third-party providers – are called in to solve the problem.
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?