Oaktree began to invest in European high yield bonds as an adjunct to its U.S. portfolios. The European portfolios are run from our London office under the direction of Bill Moores, using the same investment approach as our U.S. high yield bond portfolios. We see potential in Europe for benefits in terms of both risk/return and diversification.

"Oaktree got in on the ground floor almost a decade ago and helped to create a European high yield market capable of great growth" says Moores. "Our goal is to pursue the higher yields of these bonds while managing actively and limiting the risk."

We view careful credit analysis as the key to the successful selection and management of high yield bonds, and approach high yield credit from the perspective of a lender rather than a trader or a market timer. Our future-oriented approach and proprietary credit scoring methodology, refined over many market cycles, provides a systematic method for reviewing the same key quantitative and qualitative variables for each issue.

We stress broad issuer and industry diversification, and we avoid the higher-risk end of the high yield debt spectrum, purchasing only bonds we are comfortable holding for the long term, from issuers that we are confident will make interest and principal payments as scheduled. The resulting stable portfolio also minimizes transaction costs.

Click here for information regarding risk disclosures associated with the strategy.