/institutional/perspectives/sector-views/high-yield-and-bank-loan-outlook-april-2015

High-Yield and Bank Loan Outlook - April 2015

How high yield bonds and bank loans can help investors position for the Federal Reserve’s upcoming rate tightening cycle.

April 13, 2015

Report Highlights

  • The Credit Suisse High Yield and Leveraged Loan Indices posted positive quarterly returns of 2.6 percent and 2.1 percent in the first quarter 2015, a rebound from two consecutive quarters of negative returns in both sectors.
  • A bullish undertone exists in bank loans, but sentiment in the high-yield corporate bond market remains uneasy heading into the second quarter based on a monthly loss for the high-yield index in March 2015.
  • Investors should expect some volatility ahead as the market appears to be underestimating the full impact of the severe winter on U.S. economic data and Q1 2015 GDP growth.
  • Given lower durations and attractive yields relative to investment-grade corporate bonds and Treasuries, we believe leveraged credit is positioned to outperform in the next Fed tightening cycle.
 

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VIDEOS AND PODCASTS

Fed Day: The Argument for 100 Basis Points 

Fed Day: The Argument for 100 Basis Points

Scott Minerd, Guggenheim Partners Global CIO and Chairman of Guggenheim Investments, joins Bloomberg TV on Fed Day.

Macro Markets Podcast 

Macro Markets Podcast Episode 25: Fixed-Income Pain Giving Way to Opportunity

Anne Walsh, Chief Investment Officer for Fixed Income, on the economic and credit cycle, and on risk and opportunity across the fixed-income landscape.







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