Credit market commentary

Strong corporate and economic data caused high yield bonds and senior secured loans to rally. High duration portfolios, like the Barclays Aggregate, continued to struggle amid rising rates. High yield bonds generated their strongest quarterly return since Q1 2017.

High-duration fixed income, such as the Barclays Agg, performed well in August due to falling 10-year U.S. Treasury yields. Strong corporate earnings and U.S. economic data provided tailwinds for HY Bonds and Senior Secured Loans.

HY Bonds and Senior Secured Loans outperformed the Barclays Agg as retail inflows supported the leveraged credit markets on the back of strong monthly returns for U.S. equities.

High yield bonds and senior secured loans gain in June. Yield curve flattens on rising rate expectations.

Interest rate sensitivity drove returns during the month as higher-duration assets tended to outperform as 10-year Treasury rates fell.

As interest rates rose, high yield bonds and senior secured loans outperformed more duration-sensitive asset classes.