In the final quarter of 2025, the BrandywineGLOBAL High Yield Fund achieved positive returns, largely fueled by a resurgence in the basic industrial sector and a strong commodities environment. Despite these gains, a tactical decision to moderately underweight duration relative to the benchmark slightly hindered overall performance during this period. Moving forward, the fund maintains a constructive outlook, underpinned by several key factors: robust economic expansion, supportive fiscal policies, and an accommodative stance from the Federal Reserve, which are expected to bolster the corporate sector. Furthermore, the prevailing starting yields of 6% to 7% are considered particularly attractive, surpassing levels observed over the past decade.

During the fourth quarter of 2025, the U.S. fixed income landscape saw a modest uptick. This positive movement was primarily sustained by expectations of central bank interest rate reductions, persistent economic vitality, and consistent investor demand. These supportive elements collectively managed to overshadow concerns stemming from tariff policies and broader uncertainties within the market. Specifically, the recovery in basic industries played a significant role, as sectors that faced headwinds earlier in the year began to show considerable improvement. This recovery was synchronized with a broader strengthening in commodity markets, further contributing to the fund's positive trajectory.

The strategic decision to maintain a moderate underweight in duration, while designed to mitigate interest rate risk, resulted in a minor drag on the fund's performance as market rates eased. However, the overarching positive forces—such as a resilient economy and proactive central bank measures—were more dominant. The report also underscores that the current yield environment presents a compelling entry point for investors, with high-yield bonds offering returns considerably higher than historical averages. This, combined with an anticipated continuation of favorable economic conditions and a supportive monetary policy, paints a promising picture for the fund's future performance.

In essence, the BrandywineGLOBAL High Yield Fund navigated the fourth quarter of 2025 successfully, capitalizing on improving industrial conditions and a robust commodities backdrop. While duration positioning presented a slight challenge, the overall market environment, characterized by central bank support, solid economic fundamentals, and attractive yields, sets a positive tone for the fund's continued growth and stability in the evolving financial landscape.