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Strategy Overview

The Global High Yield strategy combines top-down analysis of macroeconomic conditions with bottom-up fundamental analysis in order to determine where the most attractive valuations exist during the business cycle—considering country, currency, credit quality, sector allocation, and security selection. Macroeconomic perspective is combined and incorporated with our quantitative screens and fundamental analysis when constructing high yield portfolios. Our valuation process is primarily focused on identifying and investing in bonds that have attractive "real-" and "risk-" adjusted yields. The strategy prudently rotates portfolio positions and seeks to control risk by purchasing undervalued securities.

 

Strategy Profile

 

 

Key Stats*

Strategy AUM 1 $103.1
Inception Date January 1, 2010

Philosophy

Objective

The strategy seeks to generate a high level of income and captial gains.

Universe

Global high yield corporate debt issuers generally rated below BBB- or Baa3 by at least one rating agency. On occasion, the strategy will invest in unrated securities deemed to be of comparable quality. We may also invest, to limited degrees and dependent on client guidelines, in investment-grade corporate bonds, emerging market debt, preferred stock, and convertible securities.

Investment Process Summary

We apply our top down global fixed income process when structuring global high yield portfolios. This macroeconomic and currency perspective is combined and incorporated with our fundamental analysis when constructing global high yield portfolios. The cheapness of individual sectors and issuers is determined using these quantitative and qualitative credit tools.

Research Process Focused on Fundamental Credit Analysis

Our company analysis focuses on the fundamental economic drivers of the business and assesses whether there is adequate financial strength and flexibility to meet ongoing commitments. Avoiding deteriorating situations is critical to delivering consistent results. We evaluate not only the business prospects of the issuer but also whether the current price is attractive relative to risk. In analyzing the underlying risk/return relationship, we look at the individual bond characteristics such as coupon, tenor, covenants, call schedule, bond rating, and size, which all factor into the price we are willing to pay. We take a position in a security when we have sufficient downside protection and it is priced attractively. We seek to invest in businesses with improving return on invested capital, stable or improving competitive advantages, manageable balance sheets, and outstanding managers and employees.

We also evaluate management’s treatment of bondholders and stockholders. We believe management teams that understand the competitive dynamics of their business and employ prudent capital allocation often produce value for bondholders and stockholders.

Security Selection on Strong Theses

After the credit research is complete, the portfolio managers determine whether a security is attractive relative to asset and interest coverage and relative to other securities with comparable risk. We will only own the bonds of a company that we can analyze and value.

Sell Discipline 

We follow a disciplined approach to sell decisions, with issues sold for two primary reasons—valuation and fundamental deterioration. An issue is typically sold as it approaches our yield target and/or another more compelling investment opportunity arises. Alternatively, an issue may also be sold when the initial thesis supporting the investment is no longer valid, and we believe significant downside is likely.

At a Glance

  • Primary Benchmark: Bloomberg Global Unhedged High Yield Index or other high yield benchmark, as specified by client direction
  • Portfolio construction combines the Global Fixed Income team macroeconomic and currency strategy with the quantitative and fundamental sector and security selection analysis of the High Yield team
  • Yield, option-adjusted spread, and expected total return adjusted for default probability are our primary measures of value
  • Investments typically are concentrated in sectors and individual issuers that we believe offer the best total return potential
  • Position sizes limited to 5% at purchase, excluding issues of the U.S. Government

Portfolio Managers

Bill Zox, CFA

Portfolio Manager

Brian L. Kloss, JD, CPA

Portfolio Manager

Tracy Chen, CFA, CAIA

Portfolio Manager

Michael Arno, CFA

Portfolio Manager & Senior Research Analyst

Renato Latini, CFA

Portfolio Manager & Senior Research Analyst

Jack Parker, CFA

Portfolio Manager

View Full Fixed Income Team

Performance*

  • Annualized Returns
  • Calendar Year Returns
  • GIPS Statistics

Annualized Returns

Annualized Returns

As of 9/30/2025

Chart

Bar chart with 4 data series.
The chart has 1 X axis displaying categories.
The chart has 1 Y axis displaying values. Data ranges from 2.48 to 13.78.
End of interactive chart.
Period
Gross (%)*
Net (%)*
BGHY (%)
BAGHY (%)
QTD2.822.682.602.48
YTD7.617.169.609.52
1 Year7.196.579.208.27
3 Year13.4812.7813.7812.60
5 Year5.745.075.314.77
7 Year5.624.954.914.79
10 Year6.185.505.695.70
Since Inception6.966.286.246.10

Calendar Year Returns

Calendar Year Returns

As of 9/30/2025

Period
Gross (%)*
Net (%)*
BGHY (%)
BAGHY (%)
20257.617.169.609.52
20249.518.819.197.48
202315.3614.6314.0413.41
2022-11.66-12.24-12.71-13.23
20213.052.390.991.37
20209.558.857.038.03
201912.4511.7312.5613.73
2018-4.47-5.09-4.06-3.36
201710.199.4810.4310.20
201614.4313.7014.2714.77
2015-3.63-4.25-2.72-4.17

GIPS Statistics

GIPS Statistics

As of 9/30/2025

Year or YTD
# of Accts
Market Value ($MM)
Firm Assets ($MM)
Composite Dispersion (%)
Composite St. Dev. (% 3-Year Rolling)
BGHY St. Dev. (% 3-Year Rolling)
BAGHY St. Dev. (% 3-Year Rolling)
202516061,306-5.455.875.43
202414258,892-8.959.409.00
202312959,468-8.949.358.91
202222052,601-10.2112.5812.03
2021418567,356-7.6510.6510.01
2020424763,872-7.9110.7610.14
2019422674,024-4.124.624.16
2018547870,070-4.755.024.95
2017549874,382-5.535.655.90
2016550765,498-6.046.246.43
2015641868,8190.235.555.685.74

Characteristics*

  • Portfolio Characteristics
  • Quality Allocation
  • Duration Allocation
  • Region & Currency
  • Sector Allocation

Portfolio Characteristics

Portfolio Characteristics

As of 9/30/2025

Characteristic
Brandywine Global
BGHY
Avg. Quality 2BBB+
Avg. Maturity (Years)4.845.87
Avg. Effective Duration (Years)3.103.55
Avg. Coupon (%)6.776.28
Avg. Yield-to-Worst (%)6.486.77
Avg. Yield-to-Maturity (%)6.697.02
Number of Issues1483,540

Quality Allocation

Quality Allocation

As of 9/30/2025

Quality Rating
Brandywine Global (%)
BBB or Higher18.0
BB45.0
B30.1
CCC6.8

Duration Allocation

Duration Allocation

As of 9/30/2025

Duration Range
Brandywine Global (%)
<1 Year19.5
1-3 Years22.9
3-7 Years44.7
7-10 Years1.2
10+ Years2.2
No Duration9.5

Region & Currency

Region & Currency

As of 9/30/2025

Region
Country (%)
Currency (%)
Asia-Pacific ex-Japan1.2-
Emerging Markets7.3-
Europe ex-Eurozone4.01.7
Eurozone4.615.8
Japan0.5-
Middle East & Africa--
North & Central America81.982.5
South America--
Supranational--
Other0.3-

Sector Allocation

Sector Allocation

As of 9/30/2025

Sector
Brandywine Global (%)
BGHY (%)
Basic Industry7.35.6
Capital Goods5.16.9
Communications3.411.5
Consumer Cyclical23.513.9
Consumer Non-Cyclical5.98.9
Energy8.16.7
Financial Institutions22.310.6
Government3.0-
Other Industrial2.71.2
Technology5.64.6
Transportation2.52.3
Cash9.2-
Other1.527.9

Videos

1. What Is Your Outlook for the Global Economy? (0:06)
2. What Is Your Outlook for Global Currency and Bond Markets? (1:59)

Global Macro Overview

3rd Quarter 2025 | October 14, 2025

Head of Global Macro Strategy & Portfolio Manager Paul Mielczarski says the global economy has held up better than expected and offers his outlook for the rest of the year.

Download Slides | Read Transcript

Paul Mielczarski

Head of Global Macro Strategy & Portfolio Manager

Investment Options

Available Investment Options

Global High Yield
Separate Accounts
FTGF Brandywine Global High Yield Fund
Cross-Border Irish Funds
1
The Firm's AUM includes Diversified Value Equity non-discretionary assets of $294.0M and Fundamental Equity non-discretionary assets of $3,822.2M, both of which are reported on a one-month lag.

2
The "Blended Weighted Average Credit Quality Rating" is determined as follows: in line with the methodology used by Bloomberg Global indices, the middle rating from the three major NRSROs (S & P, Moody's, and Fitch) will be assigned to each security. In the event that ratings are provided by only two agencies, the lowest rating will be assigned. If only one agency assigns a rating, that rating will be applied. If the security is not rated by one of the three major agencies, U.S. treasuries and certain U.S. agencies are given the U.S. issuer rating. Sovereign treasuries are given the sovereign issuer rating. All other unrated securities are given an internal rating following the credit ratings procedures. The equivalent numerical rating is assigned to each security based on the Security Level scale. A Portfolio Level scale is applied on the weighted average calculation to round for fractional numerical ratings and then converted to an alpha weighted average rating. Cash is included and received the highest rating.

Data is obtained from Bloomberg (©2025, Bloomberg Finance LP) and is believed to be accurate and reliable.

*Supplemental information to the attached Global High Yield GIPS Report, which provides gross and net performance of the named strategy and a detailed description of the performance calculation methodology, index descriptions, and other disclosures. Gross performance returns include transaction costs but do not reflect the deduction of Brandywine Global's management fee. Net performance is calculated using a model approach whereby we use the highest tier of the appropriate strategy's fee schedule as disclosed in Part 2A of the Firm's Form ADV. All performance results are presented before custody charges, withholding taxes and other indirect expenses. Performance results of the named strategy are presented gross and net of management fees. Brandywine Global characteristics were derived using a representative account of the named strategy. In most cases, representative account and composite performance and characteristics will vary slightly. Investment objectives are aspirational in nature, inherently uncertain, and should not be regarded as a guarantee of future performance. Past performance is no guarantee of future results.

Inception Date: January 1, 2010

BGHY = Bloomberg Global High Yield Index
BAGHY = ICE BofAML Global High Yield Index

Returns shown in USD

Brandywine Global Investment Management, LLC (the "Firm") is a wholly owned, independently operated, subsidiary of Franklin Resources, Inc. Brandywine Global Investment Management, LLC claims compliance with the Global investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Brandywine Global Investment Management, LLC has been independently verified for the periods January 1, 1993 through June 30, 2024. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. The Global High Yield Composite has had a performance examination for the periods July 1, 2011 through June 30, 2023. The verification and performance examination reports are available upon request. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Disclosed total firm assets represent the total market value of all discretionary and nondiscretionary, fee-paying and non-fee-paying assets under the Firm's management. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. The Global High Yield Composite (the "Composite") Inception date: January 1, 2010. Creation date: January 1, 2010. The Composite includes all fully discretionary, fee-paying, actively managed Global High Yield Non-Constrained accounts with no composite minimums. The holdings consist of high yielding instruments issued globally that Brandywine believes are going to produce a high level of current income and capital appreciation. The strategy may employ the use of forward contracts, futures, and swaps which may increase the overall risk of the strategy. The portfolios are typically invested in 50-100 securities. Effective 11/30/12, the secondary benchmark was changed to the ICE BofAML Global High Yield, which is more reflective of the strategy. The Bloomberg Global High-Yield Index provides a broad-based measure of the global high-yield fixed income markets. The Global High-Yield Index represents that union of the U.S. High-Yield, Pan-European High-Yield, U.S. Emerging Markets High-Yield, CMBS High-Yield, and Pan-European Emerging Markets High-Yield Indices. The ICE BofAML Global High Yield Index tracks the performance of USD, CAD, GBP, and EUR denominated below investment grade corporate debt publicly issued in the major domestic or eurobond markets. Preliminary data, if so noted, reflects unreconciled data for the most recent reporting period. Portfolios are valued daily on a trade date basis and include dividends and interest as well as all realized and unrealized capital gains and losses. Return calculations at the portfolio level are time-weighted to account for periodic contributions and withdrawals. Performance results are calculated on a before tax, total return basis. The Composite returns consist of size-weighted portfolio returns using beginning of period values to weight the portfolio returns. Monthly linking of interim performance results is used to calculate quarterly and annual returns. Composite's valuations and returns are computed in U.S. Dollars ("USD"). The results are presented in USD or in other currencies (to accommodate overseas investors), the latter by converting monthly USD returns into other currency returns using the appropriate currency exchange rate returns. Gross returns reflect the deduction of trading expenses. Net-of-fees returns is calculated using a model approach whereby we use the current highest tier of the appropriate strategy's fee schedule as disclosed in the Form ADV. Composite dispersion is calculated using the asset-weighted standard deviation method for all portfolios that were in the Composite for the entire year. Composite dispersion is not presented for periods with five or fewer portfolios. The number of accounts and market values are as of the end of the period. The three-year annualized standard deviation, calculated using gross-of-fee returns, measures the variability of the composite and the benchmark returns over the preceding 36-month period. Gross-of-fees returns are used to calculate the presented risk measures. Past performance is no guarantee of future results. A complete list of composites, and limited distribution pooled funds descriptions as well as a list of broad distribution pooled funds is available upon request. Institutional Client Separate Account Management Fee Schedule (minimum initial investment: $25 million): 0.55% on all assets. Additional information on the Firm's fee schedule can be found in Form ADV Part 2A which is available upon request. The management fee schedule and total expense ratio for Brandywine Global High Yield Bond Fund - BGIMT, which is included in the composite, are 0.55% on all assets and 0.675%, respectively.

General Disclaimers: This material has been prepared by Brandywine Global Investment Management, LLC ("Brandywine Global") and is provided to certain qualified institutions, financial intermediaries, and institutional investors for informational purposes only. It may not be reproduced or redistributed without Brandywine Global's prior written approval. This material is not intended to be a forecast, research, or investment advice, and is not a recommendation, or an offer or solicitation to buy or sell any securities or to adopt any particular investment strategy. The information set forth herein has been derived from sources believed to be accurate, reliable, and current as of the date of this material, but is subject to change without notice. The opinions expressed may differ from those of other Brandywine Global portfolio management teams and our affiliates. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be, interpreted as recommendations. The material was prepared without regard to specific objectives, financial situation or needs of any investor and should not be used as the basis of any investment decision.

Risk: All financial investments involve an element of risk. Past performance does not guarantee future results. The value of investments and the income derived from investments will fluctuate and a loss of principal can occur.

Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial operations outside of the U.S. can involve additional risks relating to political, economic, or regulatory conditions in foreign countries. These risks include market/currency fluctuations, withholding or other taxes, trading, settlement, custodial, and other operational risks, and less stringent investor protection and disclosure standards in some foreign markets. All of these factors can make foreign investments, especially those in emerging markets, more volatile and potentially less liquid than U.S. investments. In addition, foreign markets may perform differently from the U.S. market.

Transactions in any option, future, commodity, or other derivative product is not suitable for all persons and accordingly, investors should be aware of the risks involved in trading in such instruments. Transactions in derivatives have the potential to increase liquidity risk and introduce other significant risk factors of a complex character. All securities trading, whether in stocks, options, or other investment vehicles, is speculative in nature and involves substantial risk of loss. No assurance, representation, or warranty is made by any person that any of the aims, assumptions, expectations, objectives, and/or goals stated herein will be achieved. Nothing contained in this material may be relied upon as a guarantee, promise, assurance, or representation as to the future.

Fixed income securities are subject to the risks associated with debt securities generally, including credit, liquidity and interest rate risk. High yield and lower-rated fixed income securities involve greater risk than investment-grade securities. Asset-backed, mortgage-backed or mortgage related securities are subject to additional risks such as prepayment and extension risks. High yield bonds possess greater price volatility, illiquidity, and possibility of default.

Equity investments are subject to market risk. The value of investment may fluctuate in response to the prospects of individual companies, particular sectors, and/or general market conditions. Investments in in speculative and/or small-cap, mid-cap and micro-cap companies may involve a higher degree of risk and volatility than investments in larger, more established companies, including such risks as lack of product diversification, potentially insufficient capital resources and greater exposure to business and economic cycles.

Portfolio Structure: Each client’s portfolio is individually managed and may vary from the information shown in terms of allocations, portfolio holdings, characteristics, and performance. Current and future portfolio compositions and performance may be significantly different. Any securities, sectors or allocations referenced may or may not be represented in portfolios of clients of Brandywine Global, and do not represent all of the securities purchased, sold, or recommended for client portfolios. The reader should not assume that any investments in securities, sectors and/or markets identified or described were or will be profitable or that similar investments will be available in the future.

Outlook: Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this material and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected herein. These forecasts are subject to high levels of uncertainty that can affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Certain information or statements contained herein may constitute a forward-looking statement. Forward- looking statements are predictive in nature and speak only as of the date they were made. Brandywine Global assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements refer to future events or conditions and are subject to a number of assumptions, risks and uncertainties that could cause actual results or events to differ materially from current expectations.

Third-Party Ratings: Any unpublished third-party rankings, awards or similar groupings have inherent limitations and qualifications, and are not indicative of the experience of any client or investor or of the future performance of any product described herein. There can be no assurance that the universe upon which the ratings or awards were based included all investment products within each category that are actually in operation or existence. The investment products on which the ratings were based may differ substantially in terms, objective, strategy, target risk return profile and certain other significant respects from those referenced herein.

Indices/Benchmarks: Indices are unmanaged and are not available for direct investment. Indices are not subject to fees and expenses typically associated with separate accounts or investments in funds. References to indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only and do not imply that the portfolio will achieve similar results. The index composition may not reflect the manner in which a portfolio is constructed. While an adviser seeks to design a portfolio which reflects appropriate risk and return features, portfolio characteristics may deviate from those of the benchmark.

Selection of Representative Account: Representative accounts are generally the least restrictive account in a composite at the time of selection. Each client account is individually managed; individual holdings will vary for each account and there is no guarantee that a particular account will have the same characteristics as described. Actual results may vary for each client due to specific client guidelines, holdings, and other factors. In limited circumstances, the designated representative account may have changed over time, for reasons including, but not limited to, account termination, imposition of significant investment restrictions, or material asset size fluctuations.

Environmental, Social and Governance (“ESG”): This material discusses Brandywine Global’s current efforts to integrate responsible and sustainable investing principles into its investment process. Certain examples are provided herein for illustrative purposes only and are not intended to be representative of Brandywine Global’s investment process with respect to every investment. ESG investments may be viewed as “sustainable, “responsible”, or “socially conscious” among other names. Analysis and integration of ESG factors is qualitative and subjective by nature, and there is no guarantee that the ESG criteria used, or judgment exercised, by Brandywine Global will reflect the values of any one particular investor. Different investment managers may utilize and evaluate ESG factors in different ways. Investing in ESG investments carries the risk that under certain market conditions, the investment strategy may underperform strategies that do not utilize a responsible investment strategy. An investment’s ESG performance or Brandywine Global’s assessment of such performance may change over time. ESG is not a uniformly defined characteristic and information used to evaluate ESG characteristics may not be readily available, complete, or accurate, and may vary across providers and issuers. The ESG considerations assessed as part of the research and investment approval process may vary across eligible investments and not every ESG factor may be evaluated for every investment. There is no guarantee that the evaluation of ESG characteristics will be additive to a strategy or account’s performance.

This website and the information contained herein does not constitute and is not intended to constitute an offer of any kind, including securities and accordingly should not be construed as such. Any products or services referenced on this website are for informational purposes only and may not be licensed or permitted to be purchased in your jurisdiction, and unless otherwise indicated, no regulator or government authority has reviewed this website or the merits of the products and services referenced. The content of this website is intended for eligible institutional investors (as such term is defined in any given jurisdiction). Before acting on any information on this website you should be well informed of and observe all applicable laws, rules and regulations of your home jurisdiction and obtain independent advice if required.

Past performance is no guarantee of future results.