[Videos] DDJ Analyst Sector Updates - Part 2

Posted on December 19, 2020

Are you exploring high yield? Watch these videos to learn more about the challenges and opportunities our Senior Research Analysts are seeing within their respective high yield sectors.  

During our DDJ Virtual Investment Conference held in October 2020, our analysts provided in-depth video updates on the high yield sectors they cover.

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[Videos] DDJ Analyst Sector Updates - Part 1

Posted on December 14, 2020

Interested in learning about the challenges and opportunities our senior research analysts are seeing within their respective high yield sectors? 

During our DDJ Virtual Investment Conference held in October 2020, our Senior Research Analysts provided in-depth video updates on the high yield sectors they cover. 

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[Video] DDJ’s ESG Process & New Dedicated Strategy

Posted on December 11, 2020

During DDJ's Virtual Investment Conference held in October 2020, Portfolio Manager and Director of Research Roman Rjanikov, discussed DDJ’s Environmental Sustainability High Yield Strategy that DDJ recently launched via a simulated portfolio1.

In this video, Mr. Rjanikov also explains how DDJ has incorporated ESG analysis into its investment process.

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The Divergence Between High Yield and Equities

Posted on November 20, 2020

“If one is concerned about valuations and the future performance and volatility of the equity markets, from a historical perspective, high yield appears cheap relative to equities at this point in the cycle.”
-David Breazzano

The following is a summary of an excerpt from our 2020 DDJ Virtual Investment Conference. To access the video featuring David Breazzano, DDJ’s President, Chief Investment Officer and Portfolio Manager, addressing this topic, please click here.

 

In order to better understand the current state of the high yield market and where we see opportunities, let’s first take a step back and look at it from a broader market perspective by comparing high yield to equities, with equities represented by the S&P 500 index. I believe it's important to make this comparison to better understand the relative value between the two asset classes. In addition, before we look at the current environment, it is informative to get a historical perspective, so let’s review the past two major inflection points and subsequent recoveries in those markets, with the first such inflection point occurring during the 2001 to 2004 period.

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The Power of Board Diversity by College Student Saamia Bukhari

Posted on October 28, 2020

A few months ago, DDJ hosted a writing contest geared towards college students. Students were tasked with submitting a paper discussing the topic of board diversity and whether it has an impact on corporate performance.

This week we are featuring the work of our first place entrant, Saamia Bukhari. Ms. Bukhari presents key thoughts and arguments as to why diversity can empower a company’s board of directors, as long as such diversity is achieved successfully under the conditions of inclusivity and sincerity. Citing powerful research from various studies, the writer presents empirical evidence that diversity can positively affect a company’s bottom-line, as well as drive innovation from within. We invite you to read her full paper below.

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Important Concepts and Terminology Relating to Restructurings, Part 1

Posted on October 2, 2020

When many investors hear terms like “default” or “bankruptcy”, negativity and losses probably come to mind, and for good reason. Over the past 25 years, on average, when a high yield bond has defaulted, investors lost almost 60 cents on every dollar invested.1

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144A Bonds and Why We Buy Them

Posted on September 24, 2020

Rule 144A is therefore very valuable to issuers, as it reduced the cost of capital by improving the liquidity of the institutional secondary market for privately placed bonds.”
– Andrew Ross, CFA, Director, Portfolio Specialist

Not familiar with 144A bonds? You’re not alone. Given the growth of bonds issued via Rule 144A (“the Rule”) and their increased importance in the high yield market, we thought it would be informative to provide a brief overview of Rule 144A and the bonds issued under this rule.

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Does Board Diversity Impact Corporate Performance?

Posted on September 16, 2020

Today we are very happy to announce the winners of the DDJ Capital Management White Paper Challenge. In this contest, college students were tasked with submitting a paper discussing the topic: “Does Board Diversity Impact Corporate Performance?” Of all the contestants, we have selected the following two winners.

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The State of Corporate Credit Quality

Posted on August 24, 2020

Now that the U.S. economy is officially in a recession, what is the state of corporate credit quality? During a recent discussion with the CFA Society of New York, DDJ President, Chief Investment Officer and Portfolio Manager David Breazzano offered his opinion on the subject:

It's a very interesting question. And I'd like to answer it in a couple of different ways. One, the short answer is corporate credit quality certainly has declined as a consequence of the current recession. However, to understand this, it is necessary to look “under the hood” of the high yield market and dig into some of the statistics. If one were to look at the credit quality of a broad high yield bond index, it would show that BBs have actually increased as a percentage of the overall index since the start of the year, whereas Bs and CCCs have declined. So, at a statistical first blush, one would look at it and say, "Wow, credit quality actually has improved this year."

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COVID-19 - Perception Versus Reality

Posted on August 5, 2020

The market’s perception of the current state of the pandemic can change quickly and result in heightened volatility. For example, the perception that certain states may have opened too soon or that a second wave of the virus is imminent, and thus economic pullbacks are on the horizon, can increase market volatility significantly. Such changes in perception are often driven by the latest headlines, which can be misleading and therefore do not represent reality.

As prudent investors, we need to filter out the day-to-day noise and focus on the factors that will determine whether the economic reopening can continue or broad pullbacks will be needed in certain areas. In this regard, I believe that the most important factor to monitor in a specific region is hospital capacity utilization resulting from COVID-19 patients, in particular ICU bed capacity. Fatalities are of course the most important metric that we as a society must strive to minimize; however, fatalities typically rise after an increase in ICU beds and ventilator usage, and will thus lag changes in hospital capacity.

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