In the third quarter of 2025, the Multi-Manager High Yield Opportunity Fund recorded a return of 2.23%. This performance was slightly below the 2.40% return achieved by its benchmark, the ICE BofA U.S. High Yield Constrained Index. The overall high yield market, as measured by this index, demonstrated a positive trend during the quarter.
A closer look at the high yield market reveals a nuanced performance across different credit ratings. Specifically, BB-rated securities yielded a return of 2.20%, while B-rated securities performed marginally better at 2.43%. The highest returns within the high yield segment came from CCC and lower-rated securities, which posted a robust 3.63%. The industrials sector, a significant component of the high yield market, also experienced a favorable quarter with a 2.46% return. Within this sector, certain subsectors notably outperformed, including telecommunications, energy, and media, indicating strong growth or recovery in these areas during the period.
This performance highlights the dynamic nature of the high yield market, where different segments can exhibit varied returns based on their risk profiles and prevailing economic conditions. Investors in such funds navigate a landscape where careful sector and credit selection are crucial for achieving desired outcomes. The positive returns across most segments suggest a healthy, albeit differentiated, environment for high yield investments in the third quarter of 2025.
