In 2023, many investors sat idle waiting for spreads to widen. However, the heightened quality of the high yield space has made this less likely. With yields earlier in 4Q23 in the 9.50% range, and given historical returns when yields have reached those levels, it was clear that grabbing the coupon and locking in the higher payout, regardless of spread, was the correct execution. However, fewer investors took advantage of the +13.46 returns in high yield (as represented by the ICE BofA U.S. High Yield Index), as outflows continued in 2023 (-$7.9 billion) after seeing outflows of -$48.9 billion in 2022.
Investment Partner
The ICE BofA U.S. High Yield Index tracks the performance of U.S. dollar denominated below investment grade rated corporate debt publicly issued in the U.S. domestic market. To qualify for inclusion in the index, securities must have a below investment grade rating and an investment grade rated country of risk. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.
The commentary is the opinion of the subadviser. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.
All investments carry a certain degree of risk, including possible loss of principal.
Past performance is no guarantee of future results.
All investments carry a certain degree of risk, including possible loss of principal.
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