Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
Blog Home
Jeff Margolin
Closed-End Fund Analyst
Click for Bio

Follow Jeff on LinkedIn
Ryan Issakainen
ETF Strategist
Click for Bio

Follow Ryan on LinkedIn

  Senior Loan & High Yield Review – 4th Quarter 2014
Posted Under: Senior Loan

2014 proved to be far more eventful than most predicted. Consider the nearly certain prognostication that rates would increase in 2014, the surprising impact the polar vortex had on economic activity early in the year, geopolitical headlines Russia/Ukraine, Middle East [Gaza, ISIS], Europe [Greece], etc.), Ebola fears, and last, but most certainly not least, the nearly 50% drop in the price of oil (more on this in a moment). As a result, while sentiment was relatively positive in the early part of the year, investor sentiment for credit risk reversed course and was relatively weak throughout the second half of the year.

In the third quarter, we wrote about how we believed the "risk sentiment" shift was driven by technical factors (more sellers than buyers) rather than fundamentals. Our view has simply been that the U.S. economy continues its slow, yet relatively steady march higher (with improvements in GDP and unemployment) and corporate credit fundamentals remains healthy (with modest corporate defaults and healthy profits). Indeed, the U.S. economy has proven resilient, and even surprising to many with better growth in the latter part of the year. However, despite what's occurring in the U.S., macro uncertainty continues to incite volatility in U.S. financial markets. As we enter 2015, oil will remain in the headlines given that its collapse will pressure economies that are heavily dependent on crude oil exports. The concern centers on whether we'll have an emerging market debt and currency crisis similar to that which we experienced in 1998 (when Russia defaulted on its debt). In addition, all eyes are going to be directed at whether the European Central Bank's (ECB) stimulus program (its own version of QuantitativeEasing) is enough to improve the Eurozone economy. Speculation is already mounting regarding the potential size and scale of such stimulus.

For a discussion of notable events in the senior loan and high-yield market as well as an outlook for the future, click here to read the whole report.

Posted on Wednesday, January 21, 2015 @ 3:50 PM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Senior Loan & High Yield Quarterly Review
Early Thoughts on Tax-Loss Selling Season
Seeking Alpha with Biotechnology ETFs
Municipal Market Update - 2nd Quarter 2014
Senior Loan & High Yield Review - 2nd Quarter 2014
The Other Discount Advantage
Municipal Closed-End Funds: MNCEFT Closes Above 1600; Silent Rally Continues
Commodity ETFs and the Business Cycle
Year-To-Date Performance of Municipal Closed-End Funds Shows the Importance of Balance
Mid-Quarter Update: Good Start to 2014 for Many Categories of CEF Marketplace; Still Compelling Values Available
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.