Polen Upper Tier High Yield Fund

Management & Investment Process

  • Management

  • The investment team leverages experience and knowledge within a disciplined investment process.

    • David J. Breazzano

      Head of Team, Portfolio Manager

      • 42

      • Years Industry
    • Roman Rjanikov

      Portfolio Manager

      • 20

      • Years Industry
  • Investment Process

  • The Polen Upper Tier High Yield Fund seeks to achieve its objective mainly by investing in high yield fixed income securities rated BB or B of U.S. issuers in the United States. The Fund intends to invest its assets primarily in credit instruments that are rated below investment grade by some or all relevant independent rating agencies. Polen Capital incorporates ESG considerations in the investment process and aims to construct a fixed income portfolio with a yield advantage relative to the ICE BofA BB/B U.S. Non-Financial High Yield Constrained Index.

    • Bottom-Up Fundamental Research
      • Analyze entire company, not just an individual bond/loan tranche
      • 360-degree view of business – customers, suppliers, competitors
      • Identify sustainable competitive advantages
      • ESG factors evaluated for each investment
    • Limit Credit Losses
      • Calculate and continuously monitor company’s total enterprise value
      • Focus on loan-to-value and cash flow
    • Legal Protections
      • Understand contractual protections in debt agreements
      • Assess "waterfall of value" and downside scenarios
    • Portfolio Construction
      • Security selection drives performance
      • No macro bets or themes
      • Minimize credit losses and portfolio volatility
      • Construct concentrated portfolios – overweight high confidence positions
      • Long-term investment horizon
      • Monitor to provide for appropriate diversification and liquidity
      • ESG integration consistent with client views
      • Limited exposure to CCC-rated bonds and/or leveraged loans
  • Disclosures

  • Tranche: Tranches are pieces of a pooled collection of securities, usually debt instruments, that are split up by risk or other characteristics in order to be marketable to different investors. Each portion, or tranche, is one of several related securities offered at the same time but with varying risks, rewards and maturities to appeal to a diverse range of investors.

    Waterfall of Value: This term is used to describe, in the context of an issuer’s restructuring, the value that each class of debt must be repaid before any residual value is permitted to be distributed by the issuer to more junior classes of debt.

    The ICE BofA BB/B U.S. Non-Financial High Yield Constrained Index, is a broad, unmanaged high yield index. The index contains all securities in the ICE BofA U.S. High Yield Index rated BB1 through B3, based on an average of Moody’s, S&P and Fitch, but caps issuer exposure at 2% and excludes financials. Index constituents are capitalization-weighted, based on their current amount outstanding, provided that the total allocation to an individual issuer does not exceed 2%. From inception to December 31, 2018, the composite benchmark was the ICE BofA U.S. High Yield BB/B Constrained Index. Beginning January 1, 2019, the benchmark changed to the ICE BofA BB/B U.S. Non-Financial High Yield Constrained Index. Because the investment strategy avoids investments in the Financial sector, Polen Credit believes that the non-financial version of the index provides a more representative comparison to the strategy. The index does not bear any fees or expenses, and does not reflect the specific investment restrictions and guidelines of the portfolio. The volatility and other material characteristics of the indices referenced may be materially different from the performance achieved. In addition, the portfolio’s holdings may be materially different from those within the index. Indices are unmanaged.

    Risks: Mutual fund investing involves risk, including possible loss of principal. The Fund targets investments in high yield, or below investment grade, bank loans and bonds. 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, 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 may also hold positions in equity or other assets that the Fund receives as part of a reorganization process of a high yield issuer. 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.

    ESG Risk: The Adviser integrates material environmental, social, and governance (ESG) factors into research analysis as part of a comprehensive evaluation of a company’s long-term financial sustainability. The risk that the investment techniques and risk analyses applied by the investment adviser, including but not limited to the Adviser’s integration of ESG factors into its research analysis, will not produce the desired results and that legislative, regulatory, or tax developments may affect the investment techniques available to the investment adviser and the individual portfolio manager in connection with managing the Fund. There is no guarantee that the investment objective of the Fund will be achieved.

    Investors should consider the investment objectives, risks, charges, and expenses of the Polen Upper Tier High Yield Fund carefully before investing. A prospectus with this and other information about the Fund may be obtained by calling 1-888-678-6024 or from the Fund Documents section of this webpage. It should be read carefully before investing.

    Polen Upper Tier High Yield Fund is distributed by Foreside Funds Distributors LLC., not affiliated with Polen Capital Management.