Managers with the ability to adapt to change, with the ability to manage portfolio risk factors such as yield, duration, allocation weighting, and credit quality, can find success in multiple environments.
They impose draconian penalties on suppliers for failing to deliver agreed quantities of fresh fruits and vegetables during the year, which force farmers to grow a much bigger crop than they need as a form of insurance against poor weather and other factors that may reduce their yield.
When we decompose factors explaining the returns we find that the dividend yield factor actually contributed negative 1.02% annualized to the excess return.
The team thinks all of these factors present a catalyst for investors to enjoy the higher current income versus investment grade and potentially for the yield advantage to compress further leading to modest capital appreciation.