Specialist in Asia Pacific, Japan, China, India and South East Asia and Global Emerging Market equities.

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Stewart Investors manage investment portfolios on behalf of our clients over the long term and have held shares in some companies for over 20 years. They launched their first investment strategy in 1988.

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High Yield Fixed Income

High Yield Fixed Income offers the potential for stable income and total return, while dampening volatility relative to equities and adding absolute yield relative to core bonds. Active management and a focus on downside risk strives to produce stable long-term out-performance.  We aim to generate consistent alpha relative to institutional peers, with a longer-term goal of maintaining a top-quartile percentile ranking.

Our Process

Our Strategy strives to maximize risk-adjusted returns, and seeks superior absolute returns over a market cycle, with lower volatility than the broad market.

First, and foremost, our approach is about risk control. Default risk is the dominant risk factor, and all portfolio investments meet stringent, and quantifiable minimum “margin of safety” requirements. Secondarily, we strive never to buy credit risk at the wrong price.

An optimal, risk-adjusted, portfolio construction combines dynamic fundamental, bottom-up selection, with continuous top-down portfolio risk management.


Margin of Safety

Most importantly, all portfolio investments must meet stringent, and quantifiable minimum requirements; most important among them: Minimum levels of “Asset Coverage” (proprietary estimates of each company’s real world, asset value versus its debt, plus debt-like liabilities). Minimum levels of positive “normalized” free-cash-flow relative to debt.

Relative Value Assessment

The investment process strives never to buy credit risk at the wrong price, utilizing a default-adjusted yield and spread methodology that aims to maximise the default-adjusted yield and spread of a diversified portfolio. Most basically, every portfolio investment must offer an interest rate that overcompensates for the proprietary estimate of its annual default risk.

Contrarian Risk Positioning

Our portfolio risk positions relative to the broad high yield market are typically contrarian, often considerably divergent from peers and largely indifferent to benchmark indexes. We expect to be underweight relative risk into market corrections, or real credit down-cycles. We view the resultant opportunities to rotate from relative safety into higher yielding/higher total return potential investments as a key competitive advantage.

Investment process summary

  • Minimum yield screen: with "positive event potential" exceptions

  • Minimum margin-of safety requirements; quantified and stringently applied

  • Qualitative fundamental corporate assessments to further safeguard against default risk

  • Default adjusted methodoloy, focused on the spread premium necessary to overcompensate for estimated default risk

  • Catalysts for total return, expected to result in total returns above a coupon based yield

  • Portfolio construction, combines bottom-up credit selection with top-down portfolio risk management

  • Credit risk control: managed by the dynamic, continuous implementation of the disciplined bottom-up investment process (as described above). Primary credit risks include: Default, Negative Event and ESG risks.

  • Risk monitoring and review: includes daily portfolio reporting and analysis


The Inception Date of the FSI High Yield Composites was April 30, 2017. Past Performance is not indicative of future performance. The performance of the BroadHigh Yield Composite is hypothetical, as the assets of the Select High Yield strategy and the Quality High Yield strategy have been combined to create theBroad High Yield strategy. Composite returns do not reflect the deduction of investment advisory fees. A client’s return will be reduced by the investment fees.If a client placed $100,000 under management and a hypothetical gross return of 7% were achieved, the investment assets before fees would have grown to$196,715 in 10 years. However, if an advisory fee of 0.4% were charged, investment assets would have grown to $188,987, or an annual compounded rate of 6.6%. Note: due to rounding percentages may not precisely reflect the absolute figures.

Meet the Investment team

Matt Philo

Senior Portfolio Manager, Co-Head of High Yield

Jason Epstein

Senior Portfolio Manager, Co-Head of High Yield

Linda Grillo

Head High Yield Trader

Jonathan Mann


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