Market Commentary

The Emerging Market Debt strategy returned -1.17% (gross of fees) for the fourth quarter of 2018, underperforming the Blended Index by 138 basis points (0.21%).

The High Yield strategy returned -7.00% (gross of fees) during the fourth quarter of 2018, underperforming its benchmark, the ICE BofAML U.S. High Yield Master II Constrained Index (-4.67%) by 233 basis points. The High Yield Mid-Grade strategy returned -5.74% (gross of fees) during the fourth quarter of 2018, underperforming its benchmark, the ICE BofAML U.S. High Yield BB-B Rate Constrained Index (-3.87%) by 187 basis points.

Credit spreads, like most risk assets, performed quite poorly in the final quarter of 2018, as fears over slowing global growth, tightening monetary policy and political uncertainty reached a fever pitch amongst investors.

The Long Duration Government/Credit Fixed Income strategy returned -0.10% (gross of fees) for the quarter, underperforming the Bloomberg Barclays U.S. Long Government / Credit Index, which returned 0.78%. The Long Credit Fixed Income strategy returned -2.04% (gross of fees) for the quarter, underperforming the Bloomberg Barclays U.S. Long Credit Index, which returned -1.64%.