Since the end of 2021 and as a result of structural shifts in the economy, from decarbonization to relocation of supply chains and higher geopolitical risks, interest rates entered a new regime. After two years of rates considerably higher than the previous decade, what are the implications for High Yield markets?
Definitely a new era for fixed income markets!
High yield markets are shrinking. Do you know that they have contracted by 25% over the past two years? The ICE BofA BB-B Global High Yield Index has lost $654 billion[1] in value. In the meanwhile, investor demand for credit and high yield has rebounded at the end of last year.
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Nicolas Jullien, CFA
Head of High Yield & Credit Arbitrage
”Demand for credit has been very strong since Q4 2023, in a shrinking market and amid low credit dispersion. We think it is very important to remain focused on fundamentals and to be prepared for when the tide goes out.
Navigating High Yield Markets
What are the factors explaining this contraction? Will this situation last? Take 5 minutes and discover the analysis by Nicolas Jullien, CFA, Head of High Yield & Credit Arbitrage
Take also a minute to hear Charudatta Shende our Head of Client Portfolio Management Fixed Income, discuss our investment team’s analysis of the situation on credit markets. You will understand which strengths made the success of our credit team for the past twenty years!
Discover Candriam Bonds Credit Alpha for an alternative approach and Candriam Bonds Global High Yield for a global long-only approach of investing in high yield markets.
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High yield markets are shrinking. Do you know that they have contracted by 25% over the past two years? The ICE BofA BB-B Global High Yield Index has lost $654 million in value. In the meanwhile, investor demand for credit and high yield has rebounded at the end of last year.
All investments involve risks, including the risk of loss of capital.
The most significant risks of High Yield bond strategies are: risk of capital loss, interest rate risk, credit risk, high yield risk, counterparty risk, ESG investment risk.
This list is not exhaustive and more details on risks associated with investing in high yield bond strategies are available in the related strategies’ regulatory documents.
[1] Source: Bloomberg©, ICEBofA BB-B Global High Yield Index (HW40) in USD currency, between end of 2021 and February 2024