A cautious approach to high-yield bonds that consistently outperforms

  • Fund manager David Sherman prioritizes return of capital over return on capital
  • CrossingBridge Low Duration High Yield fund focuses on preserving capital and seeking yield
  • The fund has consistently outperformed its peers in the high-yield bond market
  • Sherman and his team employ a value investing approach to select securities
  • Recent successful investments include Hawaiian Airlines parent’s equipment bonds and Chobani bonds
  • The fund also holds positions in Icahn Enterprises and StoneX Group bonds
  • Low Duration maintains a cautious approach with a low average portfolio duration
  • The fund has a high expense ratio but delivers superior returns compared to its peers
  • Sherman expects rate volatility in 2024 and remains focused on bottom-up credit selection

David Sherman, the portfolio manager of the CrossingBridge Low Duration High Yield fund, prioritizes the return of capital over the return on capital. The fund’s mission is to preserve capital first, then seek yield and capital appreciation. Sherman employs a value investing approach to select securities, focusing on how he can get his money back and the security of his investments. The fund has consistently outperformed its peers in the high-yield bond market, delivering positive returns even during bond market downturns. Recent successful investments include Hawaiian Airlines parent’s equipment bonds and Chobani bonds. The fund also holds positions in Icahn Enterprises and StoneX Group bonds. Despite a high expense ratio, the fund delivers superior returns compared to other multisector bond funds. Sherman expects rate volatility in 2024 and remains focused on bottom-up credit selection.

Public Companies: Hawaiian Airlines (Hawaiian Holdings), AMC Networks (AMCX), Cengage Group (Private), TPC Group (Private), Fiven (Private), Cannabist Co. Holdings (Private), OpNet (Private), StoneX Group (SNEX), American Airlines Group (AAL), Chobani (Private), Icahn Enterprises (IEP)
Private Companies: undefined, undefined, undefined, undefined, undefined, undefined
Key People: David Sherman (Portfolio Manager), Kirk Whitney (Assistant Portfolio Manager)

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Factuality Level: 7
Justification: The article provides information about the investment philosophy and approach of David Sherman, the portfolio manager of the CrossingBridge Low Duration High Yield fund. It includes details about the fund’s performance, holdings, and investment strategy. The information appears to be based on interviews and statements from Sherman and Morningstar ratings. However, the article lacks specific data and analysis to support some of the claims made, such as the fund’s risk-adjusted returns and its performance during the bond rout in 2022. Overall, the article provides some factual information but could benefit from more in-depth analysis and supporting evidence.

Noise Level: 3
Justification: The article provides information about the investment philosophy and approach of David Sherman, the portfolio manager of the CrossingBridge Low Duration High Yield fund. It discusses the fund’s performance and holdings, as well as Sherman’s strategies for selecting bonds. The article also mentions recent opportunities and potential risks in the bond market. Overall, the article stays on topic and provides relevant information for investors interested in high-yield bonds.

Financial Relevance: Yes
Financial Markets Impacted: The article discusses the investment strategy of the CrossingBridge Low Duration High Yield fund, which focuses on high-yield bonds. It mentions the bond rout in 2022 and the fund’s positive return during that time. It also provides information on the fund’s holdings, including bonds from companies such as AMC Networks, Cengage Group, TPC Group, and Hawaiian Holdings.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article primarily focuses on the investment strategy of the CrossingBridge Low Duration High Yield fund and does not mention any extreme events.

Reported publicly: www.marketwatch.com