The fund seeks primarily high current income and secondarily capital appreciation by investing in companies in the United States.
The fund manages assets with the help of two sub-advisers namely MacKay Shields LLC and WhiteStar Asset Management LLC.
Each sub-adviser manages its allocated portion of the fund’s assets to correspond with its distinct investment style and strategy.
The fund prefers a multi-manager investing approach with the aim of reducing volatility and downside risk.
The sub-advisers’ investment process starts with a list of companies in the benchmark index and the research team utilizes quantitative techniques and fundamental analysis to identify investment opportunities.
Next, the research team invests significantly in high-yield debt securities.
In selecting securities for the portfolio, MacKay Shields performs an independent investment analysis of each issuer to determine its creditworthiness.
WhiteStar employs both top-down and bottom-up analyses to select investments for the fund.
WhiteStar’s top-down analysis involves a macro analysis of relative asset valuations, long-term industry trends, business cycles, interest rate expectations, credit fundamentals, and technical factors to target specific industry sectors and asset classes in which to invest.
WhiteStar’s bottom-up analysis includes a rigorous analysis of the credit fundamentals and capital structure of each potential investment and a determination of relative value compared to alternative investments.
Then the manager constructs a portfolio of stocks from a list of companies favored by the research team and allocates capital based on its conviction level.
The fund may invest in debt securities issued by foreign issuers, including issuers in emerging markets.
Additionally, the fund also may invest in equity securities that will yield high dividends and in repurchase agreements.
