WALTHAM, Mass.--(BUSINESS WIRE)--DDJ Capital Management, LLC, an independent manager of high yield and special situation investments on behalf of institutional investors, announced the three-year anniversary of its DDJ Opportunistic High Yield Fund. The open-end mutual fund (tickers: DDJIX, DDJCX, and DDJRX) received a 5-star overall rating from Morningstar as of July 31, 2018.
For the three-year period that ended July 31, 2018, the Fund outperformed (on both a gross and net basis) the ICE BofA Merrill Lynch U.S. High Yield Non-Financial Index, a broad unmanaged high yield index that excludes financial issuers. In addition, according to Morningstar, the Fund’s Institutional share class (ticker: DDJIX) ranked fifth out of 588 U.S. open end funds within its High Yield Bond category in performance for that period. Based on data provided by Morningstar, that ranking places the Fund among the top 2% of its category peers in that three-year stretch.
The investment objective of the DDJ Opportunistic High Yield Fund is to achieve overall total return consisting of a high level of current income together with long-term capital appreciation. To accomplish this objective, the Fund seeks a yield advantage over the ICE BofA Merrill Lynch U.S. High Yield Non-Financial Index. The Fund invests at least 80% of its net asset value in high yield debt securities and maintains a concentrated portfolio that historically has comprised 50-70 issuers. Launched on July 16, 2015, the Fund is co-managed by David J. Breazzano, DDJ's President and Chief Investment Officer who co-founded DDJ Capital in 1996, together with Benjamin J. Santonelli and John W. Sherman, each of whom have over ten years of experience working with Mr. Breazzano at DDJ Capital.
“The three-year performance of the Fund relative to its peer set affirms DDJ's investment philosophy, which is based on a fundamental, bottom-up approach designed to exploit inefficiencies in the high yield credit markets and identify unrecognized value,” said Breazzano. “While high yield bonds have traditionally provided a hedge for investors as interest rates rise, not all high yield securities are created equally. This area of the market, particularly lower-rated issuers that may carry a higher risk profile, requires careful analysis of each individual investment opportunity. At this point in the credit cycle, with a potential inflection point possibly approaching, individual and institutional investors seeking exposure to the high yield asset class need to be especially diligent in their manager and fund selection process.”
The DDJ Opportunistic High Yield Fund, with both retail and institutional share classes, pursues DDJ’s flagship opportunistic high yield investment strategy, which seeks to generate strong risk-adjusted returns by adhering to a value-oriented, bottom-up, fundamental approach to investing with a focus on the lower tier of the high yield universe.
About DDJ Capital Management, LLC
DDJ Capital Management is an institutional manager of high yield bond and loan strategies based in Waltham, Massachusetts. Since its inception in 1996, DDJ has sought to generate attractive risk-adjusted returns for its clients by adhering to a value-oriented, bottom-up, fundamental investment philosophy. As of June 30, 2018, DDJ manages over $7.5 billion in assets on behalf of corporate pension and public retirement funds, insurance companies, mutual fund sponsors and other domestic and foreign institutional investors. DDJ’s investment team consists of professionals highly specialized in the areas of credit research, legal analysis, bankruptcy law, portfolio management, trading and business operational improvements. The firm was awarded an “A” score for both the Strategy & Governance and the Fixed Income - Corporate Non-Financial sections of its 2018 Assessment Report prepared by the United Nations Principles for Responsible Investment (UNPRI), the world’s leading proponent for responsible investing. For more information on DDJ Capital, please visit www.ddjcap.com.
Past performance is no guarantee of future returns.
The DDJ Opportunistic High Yield Fund is not suitable for all investors, and an investor in the DDJ Opportunistic High Yield Fund should consider the Fund's investment objectives, risks, and charges and expenses carefully before investing. This and other important information is contained in the Fund's summary prospectus and prospectus, which can be obtained by calling the Fund’s transfer agent at 844-363-4898 or by visiting the Fund's website here. Investors are encouraged to carefully read such materials before investing.
Investing in mutual funds involves risk, and loss of principal is possible. The Fund targets investments in high yield, or below investment grade, fixed income securities. Such investments are subject to several types of investment risk, including, without limitation, credit risk (i.e., the risk that the issuer may be unable to make timely interest payments as well as repay the principal upon maturity), interest rate risk (i.e., the risk that their value will be inversely affected by fluctuations in the prevailing interest rates), market risk (i.e., the risk that their value may decline, sometimes rapidly or unpredictably, due to general market conditions), call or income risk, (i.e., the risk that certain debt securities with high interest rates will be prepaid or “called” by the issuer before they mature), and event risk (i.e., the risk that certain debt securities may suffer a substantial decline in credit quality and market value if the issuer restructures). In particular, debt investments in high yield issuers, which are described as speculative by major credit rating agencies and commonly referred to as “junk bonds”, are generally more susceptible to credit risk than other fixed income investments. In addition, the Fund’s high yield debt investments, including bank loans and Rule 144A securities, are subject to liquidity risk, as the Fund may not be able to sell investments at the best prices or at the value that the Fund places on them. The Fund also may target investments in equity securities, typically in high yield or leveraged issuers. Such investments, which are the most junior security in a company’s capital structure and typically subject to significant volatility in price, are subject to equity securities risk. An investor should be aware that the foregoing is not an exhaustive list of all of the risks associated with investing in the Fund.
The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-end mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10 year overall rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
The DDJ Opportunistic High Yield Fund was rated against the following number of U.S.-domiciled High Yield Bond funds over the following time periods(s) as of July 31, 2018: 588 funds in the last three years. With respect to these High Yield Bond funds, the DDJ Opportunistic High Yield Fund received a Morningstar RatingTM of 5 stars.
The Percent Ranking Category is the Fund's total-return percentile rank relative to all funds within the same Morningstar Category and is subject to change each month.
- For the one-year period ended July 31, 2018, Morningstar ranked the Fund's performance in the top 7% of 689 funds in the High Yield Bond category.
- For the three-year period ended July 31, 2018, Morningstar ranked the Fund's performance in the top 2% of 588 funds in the High Yield Bond category.
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The DDJ Opportunistic High Yield Fund is distributed by ALPS Distributors, Inc., 1290 Broadway, Suite 1100, Denver, CO 80203. ALPS Distributors, Inc. is not affiliated with DDJ Capital Management, LLC.
The ICE BofA Merrill Lynch US Non-Financial High Yield Index is a subset of the ICE BofA Merrill Lynch US High Yield Index excluding all securities of financial issuers. ICE Data Indices, LLC (“ICE Data”) is used with permission. ICE Data, its affiliates and their respective third-party suppliers disclaim any and all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the index, index data and any data included in, related to, or derived therefrom.