Senior Loan & High Yield Review - 3rd Quarter 2018
Macro Overview
Interest rates remained in an upward trajectory during the quarter as the yield on the 10-year U.S. Treasury climbed from 2.86% at the end of the second quarter to 3.06% at the end of the third quarter. Increasing interest rates were a headwind for rate sensitive fixed income assets with the Bloomberg Barclays US Aggregate Bond Index, a good proxy for the overall bond market, up 2 basis points (bps) in the third quarter and down 1.60% year-to-date (YTD). Despite higher interest rates and anemic returns in rate sensitive fixed income, high-yield bonds and senior loans have performed well. The high-yield bond index was up 2.42% in the third quarter while the senior loan index was up 1.82%. Senior loans are now up 4.03% on the year, better than all other major fixed income markets, while high-yield bonds are up 2.50% (Exhibits 1 and 2).

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Posted on Tuesday, October 16, 2018 @ 2:42 PM

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.