Navigating the Currents: A Look Back at the Carillon Chartwell Fund's Journey Through Q3 2025

Ah, the third quarter of 2025 — a period that, in truth, kept us all on our toes, a true testament to the ever-shifting landscape of the markets. For the Carillon Chartwell Short Duration High Yield Fund, you could say it was a time of thoughtful navigation, one where our commitment to short-duration high yield felt, honestly, rather prescient. We saw some genuinely compelling returns, a nice nod to the careful selections made by our diligent team, even as the broader market swayed with its own particular rhythm.

So, what was the big picture? Well, inflation, that ever-present specter, continued its gradual retreat, a welcome sight indeed, though certain core components proved stubbornly persistent. It's always a dance, isn't it? The Federal Reserve, bless their cautious hearts, opted to keep interest rates steady, a decision that whispered of careful observation rather than impulsive action. They seemed to be, for once, comfortable letting previous hikes do their work, watching for ripples in the economic pond. And what a pond it was! The economy, defying all those earlier doomsayers, continued to show remarkable resilience. Recession calls? They certainly quieted down a bit, replaced by a more optimistic chatter about a 'soft landing' — a phrase that, I admit, always makes me smile.

But let's not get ahead of ourselves. In the high yield space, credit spreads actually tightened up, a sign that investors, perhaps a touch more confident, were willing to embrace a bit more risk for the promise of juicier returns. For us, however, it was never about chasing the latest fad. Our strategy, tried and true, remained firmly rooted in seeking out those solid, creditworthy companies, the ones with robust fundamentals that could weather a sudden storm, or even just a drizzle. We’ve always believed in the power of diligent research, you see, digging deep into the financials, understanding the business, not just the buzz.

Our short duration mandate, in particular, proved to be a real asset. It's a bit like having a smaller, more nimble boat in choppy waters; easier to turn, less susceptible to the wild swings of interest rate volatility. We focused heavily on sectors we genuinely understood and believed in — healthcare, for example, with its resilient demand, and certain segments of telecommunications, where innovation continues to drive growth. We carefully pruned away any positions that began to show even a hint of fundamental weakness, because honestly, in this market, you can't afford to be sentimental.

Looking ahead, as we peek around the corner into the final stretch of the year, the landscape, naturally, remains complex. There are always new questions, aren't there? Will inflation truly dissipate? How long can economic growth continue its steady march? And what might the Fed do next? We're certainly keeping a close eye on everything, particularly any subtle shifts in consumer behavior or geopolitical rumblings. But our core philosophy remains unwavering: stick to quality, embrace short duration, and never stop searching for value where others might only see risk. It’s a marathon, not a sprint, and we intend to run it well.