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Bailey McCann, Opalesque New York:

The High Yield market saw its first down month in July, a month which was market by end of month turbulence. July was the first down month for the cohort since August of 2013, with a drop of -1.36%. Yields experienced their sharpest increase since May/June 2013 when the 10-year Treasury almost doubled.

Credit specialist fund Millstreet Capital noted the wobble in a monthly investor letter obtained by Opalesque. Millstreet is a Boston-based credit fund with a long/short high-yield portfolio with a large event-driven component. They concentrate mainly on small and mid-cap High Yield and focus on fundamental value. Millstreet is managed by Craig M. Kelleher, CFA, and Brian D. Connolly both previously held positions at Regiment Capital Advisors a Harvard Management Company High Yield spinoff.

Millstreet's performance was up 0.62% overall for the month, and is up 9.26% year to date.

The letter noted that markets also bore the brunt of a spate of heavy withdrawals - $5.4 billion worth of redemptions over the last three weeks of the month. Those redemptions happened alongside growing geopolitical tensions.

Despite being High Yield investors, the fund notes it was able to muddle through July with the long side of the portfolio benefiting from short duration plays investing at the top of the capital structure. The short side saw a bump from exploiting over-levered credits either through outright shorts or capital structu......................

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