Page 498 - DCAC Feb 2026 Files

• Senior Direct Lending ($1.3 trillion outstanding, $165 billion annual issuance) Glossary:
Spread: Spread is the difference in yield (or interest rate) between two bonds. It is typically calculated as the difference between the yield of a corporate
• Mezzanine ($204 billion outstanding, $26 billion annual issuance) bond and the yield of a U.S. Treasury bond with a similar maturity or floating rate index such as SOFR.
Duration: Duration is the most common measure of a bond’s price sensitivity to changes in interest rates. Higher durations have higher volatility with
• Distressed ($136 billion outstanding, $22 billion annual issuance) respect to market rate changes.
Convexity: Convexity is a measure of the curvature in the relationship between a bond’s price and its yield. It refines the duration calculation. Higher
Valuation: Valuations within direct lending rely on company financials, discounted convexity numbers are better, and negative convexity numbers are an undesirable feature for investors; therefore, they need to be compensated by a
higher YTM.
cash flows, and comparative analysis Yield: Yield is the return an investor earns on a bond, expressed as an annual percentage rate. While there are different types of yield (like current yield or
yield to call), the most common is Yield to Maturity (YTM).
Active Management in Fixed Income Yield to Maturity (YTM): Yield to maturity is the total anticipated return an investor will receive if the bond is held until its maturity date, assuming all coupon
payments are reinvested at the same rate.
Fixed income is far more than a conservative corner of the market. It is the Basis Point: A basis point is a unit of measure equal to one-hundredth of a percentage point (0.01%) or 0.0001.
Call Features: Call features (or a call option) give the issuer of a bond the right, but not the obligation, to repurchase (or “call back”) the bond from the
structural backbone of the U.S. economy. While the Bloomberg U.S. Aggregate bondholders before its scheduled maturity date. Call features create negative convexity for bonds, and investors demand higher yields to be compensated
for accepting this negative convexity.
Index remains a useful reference point, it only scratches the surface of a $73 trillion
Option-Adjusted Spread (OAS): The option-adjusted spread is the measure of a bond’s yield spread that excludes the cost/value of any embedded options,
market that spans diverse sectors and risk profiles. For investors, understanding such as a call feature. OAS represents the spread of a bond after eliminating call features, helping create a more apples-to-apples comparison between
positively and negatively convex bonds.
the full anatomy of fixed income is critical, not only to capture attractive risk- Swap: A swap is a derivative contract in which two parties agree to exchange the cash flows from two different financial instruments over a specified period.
The most common type is an Interest Rate Swap.
adjusted returns in today’s environment but also to appreciate its indispensable
SOFR (Secured Overnight Financing Rate): SOFR is the primary benchmark interest rate used for pricing U.S. dollar-denominated financial products,
role in powering economic growth and financial stability. As fixed income markets including loans, bonds, and derivatives, having replaced the controversial LIBOR.
Credit Rating: A credit rating is an assessment of the creditworthiness of a bond issuer (like a corporation or government) by a credit rating agency (such
continue to evolve and grow in complexity, it is increasingly important to partner as S&P, Moody’s, or Fitch). The rating evaluates the issuer’s financial strength and its ability and willingness to repay the principal and interest on its debt.
Ratings are usually expressed as letter grades (e.g., AAA, AA, Bbb, C).
with strong active managers who have expertise in navigating the various sectors
Sources: www.pgpf.org, www.pewresearch.org , Urban Institute, Ginnie Mae ,SIFMA, SFA, S&P, Fitch, Moody’s, FRED, NAIC, Russel
of the fixed income market. By employing an active, top-tier manager, investors Investments, wolfstreet.com, ycharts.com, vaneck.com, Wikipedia, Reuters, Investopedia, scribd.com, home.treasury.gov, Capital
Advisors, Pinebridge, Geggenheim, libguides.princeton.edu, etftrends, allianzgi.com, en.macromicro.me, corporatefinanceinstitute.com,
can position themselves to benefit from the many opportunities within fixed raymondjames.com, statista.com, credible.com, educationdata.org, nces.ed.gov, American Banker, bestcolleges.com, cnbc.com, experian.
com, kansascityfed.org, sofi.com, occ.treas.gov, Treppp.com, Philadelphiafed.org, dbrs.morningstar.com, dspace.mit.org, creanalyst.com,
income markets. kbra.com, bbh.com, Preqin, Cliffwater, Hamilton Lane, & PGIM
Employee Spotlight: Sarah Newman

Where is your hometown? What is your favorite dessert?
Omaha, NE I have a lot of food allergies, so it is hard to find a dessert I can eat. But
Tell us something unique about you. if someone can make a good dairy free/gluten free/soy free chocolate
mousse I will devour it!
This is tough. Not much unique about me. People find it crazy I have so
many food allergies, but I was diagnosed with Celiac when I was 26. I
guess this is unique….

What do you like best about working at Innovest?
The purpose we have to help nonprofits succeed in their mission. Also,
the people who work here are top notch.

How do you give back to the community?
Before I came to Innovest, I worked at many different nonprofit
organizations in Denver. I understand how vital they are to help those
in need. Now, I sit on various national and local boards to give back. I
also love the volunteer days that Innovest hosts once a month. With my
travel schedule it is tough to make them often, but my favorite include
when we volunteer for Christ in the City and when we plant flowers for
Central City.
What are your hobbies and interests?
I have 4 kids, so their interests are my interests. I go to a lot of volleyball
and basketball games. When we have time, my husband and I like to
cycle through the backroads of Colorado.
Tell us about your family.

I have been married to my husband for 21 years. Our oldest is a
freshman in college and our youngest is 8. My daughter will begin to
look at colleges soon and wants to attend college on the East Coast. My
rising freshman in high school thinks basketball is life and that he will
play professional basketball someday. He doesn’t believe me when I tell
him he needs to focus on school more so than basketball.

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