Significant swings in returns, first negative and then positive, have been a feature of the high yield markets, affecting sectors differently. During that time, the economic disruption Covid-19 has caused has led to many more credit rating downgrades.
The influx of Fallen Angels from investment grade status has been a feature affecting the shape of high yield indices. Meanwhile, the default rate in the US market has begun to increase, with official support in Europe suppressing any increase there.
- Both macro and company-specific news are leading to substantial swings in credit spreads, which are creating interesting opportunities for credit investors.
- The recent performance of some sectors of the credit market demonstrates the scale of the volatility being experienced across the markets.
- Here we provide some of our latest observations, and how they are influencing some, of the decisions we are making for our flagship multi-asset credit strategy.
The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.