High yield isn’t what it used to be.
“At the end of the day, high yield has had a wonderful run since 2008,” Brad Ross of Pyxis Capital told AdvisorOne at Schwab Impact 2012 in Chicago on Thursday. “It’s up about 115% since that time. So the client would get great yield and nice appreciation on the loan side.”
“Now we’re lightening up on yield and moving into the floating rate world,” he said.
“When we sit down and talk to clients, they don’t care if the investment choice is boring because they want to reduce volatility,” Ross, the firm’s president, added. “But they need to reach for alpha. Long-short strategies work well for that reason. You can take advantage of the upside with a predictable downside. You can get the alpha without stretching the risk band for the client.”
Pyxis Capital, headquartered in Dallas, is a SEC-registered investment adviser with 17 funds under management. Ross came to the firm from Ivy Funds, where he was executive vice president and national sales director. Ivy had $1 billion in assets when he joined in 2003, and $55 billion when he left last year to help start Pyxis.