Attractive levels of income potential can be generated while seeking to mitigate both interest rate and credit risk through short duration high yield. Solid fundamentals, low dollar prices and a supportive technical backdrop make high yield attractive.
†Effective 2/28/24, the MainStay MacKay Short Duration High Yield Fund was renamed the MainStay MacKay Short Duration High Income Fund. The LSEG Lipper Fund Awards annually recognize funds and companies that consistently deliver strong risk-adjusted performance. Awards are based on the Lipper Leader for Consistent Return rating, a risk-adjusted performance measure calculated over 36, 60, and 120 months. The highest scoring fund in each category wins. The MainStay MacKay Short Duration High Income Fund (MDHIX) won the 2023 U.S. award in its category. The MainStay MacKay Short Duration High Income Fund won the 2023 LSEG Lipper U.S. Award in its category over 10 Years among 11 funds. Visit lipperfundawards.com for more information. LSEG Lipper Fund Awards, ©2024 LSEG. All rights reserved. Used under license.
Lower Entry Prices Have Led to Greater Returns1
Short duration high yield prices have been below par only 25% of the time. The median 1 year return when prices were at a discount was 9.6% as shown in the chart below.
Strong Level of Income Per Unit of Duration2
The team’s philosophy and process, predicated upon margin of safety analysis, has driven higher levels of income per unit of duration.
1. Source: FactSet, as of 12/31/23. Returns shown for the period 2/28/03 – 12/31/23. High yield represented by ICE BofA U.S. High Yield Constrained Index. Returns are median performance for 1-yr, 2-yr, and 3-yr cumulative forward returns going back to 1999. Past performance is no guarantee of future results, which will vary. It is not possible to invest directly in an index.
2. MDHIX yield is represented by SEC 30-Day Yield for MDHIX based on net investment income for the 30-day period ended 12/31/23 divided by the offering price per share on that date. Yields for other share classes will vary. Index yields are represented by yield to worst. Source: Morningstar, as of 12/31/23. Short Duration IG Corporates is represented by ICE BofA 1–5-year U.S. Corporate Index; High Yield is represented by ICE BofA U.S. High Yield Constrained Index; Core Bonds is represented by Bloomberg U.S. Aggregate Bond Index; U.S. IG Corporates is represented by ICE BofA U.S. Corporate Bond Index. Past performance is no guarantee of future results, which will vary. It is not possible to invest directly in an index.
Consider MainStay MacKay Short Duration High Income Fund
Tenured credit specialist
MacKay Shields High Yield Team is comprised of senior investment professionals, each with research responsibilities for their sectors.
Intensive credit research
The investment process is predicated upon “margin-of-safety” analysis, meaning every bond must have a large margin-of-safety through asset coverage and free cash flow.
Superior credit selection
The Team’s investment strategy is a bottom-up, value-oriented approach. Adherence to the disciplined investment process helps the Team seek credits with downside cushion to help ensure any risk taking is properly compensated.
About Risk
Before considering an investment in the Fund, you should understand that you could lose money.
The Fund is not a money market fund and does not attempt to maintain a stable NAV. The Fund's NAV per share will fluctuate. Investing in below investment grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds.
Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. These risks may be greater for emerging markets.
Floating rate loans are generally considered to have speculative characteristics that involve default risk of principal and interest, collateral impairment, borrower industry concentration, and limited liquidity.
Issuers of convertible securities may not be as financially strong as those issuing securities with higher credit ratings and are more vulnerable to changes in the economy.
The Fund may invest in derivatives, which may increase the volatility of the Fund's NAV.
Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise. Bonds are also subject to credit risk, in which the bond issuer may fail to pay interest and principal in a timely manner, or that negative perception of the issuer's ability to make such payments may cause the price of that bond to decline.