Navigating Volatility: A Deep Dive into High-Yield Fund Performance
Summary of Fund Performance in Q2 2025
The Carillon Chartwell Short Duration High Yield Fund observed a diverse performance across sectors during the second quarter of 2025. Consumer goods and financial services emerged as the strongest performers, demonstrating resilience and growth within the fund's portfolio. In contrast, the automotive and retail sectors faced headwinds, resulting in a drag on overall performance. Individual holdings such as Cleveland-Cliffs, Albertsons, Teva Pharmaceuticals, Hilton, and Travel + Leisure Co. were notable detractors, negatively impacting returns. Conversely, Aquari, Clearway Energy, Jazz Pharmaceuticals, Herc Holdings, and Phinia proved to be significant positive contributors.
High-Yield Market Trends and Credit Environment
Despite a brief period of volatility in early April, triggered by tariff announcements, credit spreads for both investment-grade and high-yield instruments concluded the quarter tighter than their starting points. This tightening suggests an overall improvement in investor sentiment towards credit risk, indicating a more favorable environment for bonds across the credit spectrum. The market's ability to absorb short-term shocks and return to a tighter spread environment underscores its underlying strength and demand for yield.